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Krugman weighs in

Filed under: — david @ 11 April 2010

After weeks and months of press coverage seemingly Through the Looking Glass, Paul Krugman has sent us a breath of fresh air this morning in the New York Times Magazine, entitled “Building a Green Economy“. Krugman now joins fellow NYT columnist Tom Friedman as required reading in my Global Warming for English Majors class at the University of Chicago.

There is a lot here to comment on and discuss. The extinctions at the Paleocene Eocene Thermal Maximum, for example, were mostly limited to foraminfera, single-celled shelly protozoa living at the sea floor, not really a “mass extinction” like the end Cretaceous when the dinosaurs got feathered. The Gulf Stream is not the only thing keeping Northern Europe warmer than Alaska. Krugman’s four reasons why it’s dubious to compare costs of climate mitigation to adaption didn’t include the unfairness, that the people paying the costs of climate change would not be the same ones as reap the benefit of CO2 emission. He also seems to have missed the recent revelation that what really matters to climate is the total ultimate slug of emitted CO2, implying that unfettered emission today dooms us to more drastic cuts in the future or a higher ultimate atmospheric CO2 concentration, which will persist not just for “possibly centuries”, but almost certainly for millennia.

But despite a few off-notes, reading this very nicely written, beautifully laid out and argued piece felt like getting a deep sympathetic body massage after a bruising boxing match. Thank you, Mr. Krugman.


510 Responses to “Krugman weighs in”

  1. 51

    Maybe Ike knows something about Krugman that I don’t, but it seems to me that his reading is harsher than really required.

    For instance, Ike take issue with this sentence:

    Let’s leave aside those who dismiss climate science altogether and oppose any limits on greenhouse-gas emissions, as well as those who oppose the use of any kind of market-based remedy.

    It sounds like a simple exclusion to me, not even necessarily a dismissal–basically, “OK, these are bones I don’t have time and space to pick here.” It’s certainly not a statement of equivalence, as Eric points out.

    I also don’t understand Ike’s dismissal of Krugman’s–well, not only Krugman’s–concept that cap-and-trade is an efficient method to price the environmental “externalities.” Why couldn’t this work?

    It seems that Ike wants a more regulatory approach, criminalizing “ecocide.” I think that’s a defensible idea, but it isn’t going to happen anytime soon, I’m afraid. And it’s not either equivalent to, nor exclusive of, some economic restructuring in order to price those “externalities” which is the point of the Krugman piece.

    That said, I think Ike really has put his finger on a central point when he brings up the question of the limits to growth. He’s not the first, of course, but the discussion of this doesn’t seem to me very widespread, though it’s ever more urgent. Conventional economic theory does posit unlimited economic growth as normative and desirable–and it does seem to me that the physical possibility of this paradigm is at best undemonstrated. Very possibly Ike is right that the academic culture of economics contributes to the neglect of this question, by failing to insist on better training in the physical sciences.

    The central question to me seems to be, is economic growth possible within tight physical constraints? In principle, I’d think it should be, given that many goods and services are relatively intangible, and don’t obviously require increased physical inputs in order to increase in value. And of course we’ve seen instances of technology actually decreasing physical inputs while increasing utility.

    But this is all at the hand-waving level. There’s a real need for both detailed analyses, and big-picture critiques.

  2. 52
    Steve Bloom says:

    Re David’s reply to #40: I agree that describing the PETM as an extinction event is incomplete, but since the PETM remains the most apt worst-case analogy for our relatively near future, how should we refer to it? The speciation was certainly a good thing for mammals as a whole (in terms of diversity), but at the same time it was a very bad thing for many species and for the individuals caught up in the speciation. Perhaps we can look at mass extinction events as a marker for widespread environmental disruption, but I think that’s more or less what Krugman did. Do you have a better way to put it?

    [Response: I just don't want lack of extinction to be interpreted as hunky-dory, was my only point. Diversity is one thing, the agricultural infrastructure of a complex civilization is another. David]

  3. 53
    Hank Roberts says:

    http://www.greatchange.org/images/catton-3.gif

    ” The future portion of Panel B depicts what supposedly might happen if, as is advocated by those who have become just enough ecologically aware to sound the alarm, the nations of the world succeed in halting growth very soon…. persons who oppose the “steady state society” idea insist that such a transition would be intolerable; many of them also insist that it is not necessary. But even the advocates … assume that … growth has not yet overshot carrying capacity. If overshoot has already occurred (or must occur because of demographic and technological momentum already generated), then the model depicted in Panel B is already obsolete, whether or not such a transition to equilibrium might once have been feasible.

    Resistance to abrupt change … probably means the curve could not be … as shown in Panel B anyway. Sociocultural (and economic) momentum would tend to make Panel C more realistic…. We may come to feel guilty about stealing from the future, but we will continue to do it. Overshoot will further aggravate the reduction of carrying capacity. Crash must follow. The greater the overshoot, the greater the crash….

    … Hence, in Pane D, “carrying capacity” has been represented by two different curves. A major fraction of the recent, apparently high carrying capacity for human high-energy living must be attributed to temporary resources —i.e., non-renewable fossil acreage, the earth’s savings deposits. … serious overshoot, induced by temporarily high composite carrying capacity, will at least temporarily undermine even the sustainable component. “Energy plantations” for example s. So “temporary carrying capacity” is shown actually dipping below the horizontal line for a while, before it recovers and becomes again simply “carrying capacity”. The lesson from Panel D is that crash caused by the exhaustion of phantom carrying capacity by Homo Colossus could preclude a later cycle of regrowth.

    Either way, the past shown in Panel D more nearly accords with ecological history that do the pasts shown in Panels A, B, or C. The future hypothesized by Herman Kahn’s think-tank group is dangerously optimistic because it is based on the least realistic past. But the pasts shown in Panels B and C are also less realistic than the past shown in Panel D. The futures shown in Panels B and C are therefore also probably somewhat “optimistic” —although it seems necessary to enclose the word in quotation marks, because even the Panel B future seems dismal, and the Panel C future seems disastrous.
    ….
    Our best bet is to act as if we believed we have already overshot, and do our best to ensure that the inevitable crash consists as little as possible of outright die-off of Homo Sapiens. Instead, it should consist as far as possible of the chosen abandonment of those seductive values characteristic of Homo Colossus. Indeed, renunciation of such values may be the main alternative to renewed indulgence in cruel genocide. If crash should prove to be avoidable after all, a global strategy of trying to moderate expected crash is the strategy most likely to avert it.
    ——
    excerpts found at:
    http://www.greatchange.org/footnotes-overshoot-graphs.html

    from:

    Overshoot: The Ecological Basis of Revolutionary Change
    William R. Catton, Jr., 1982
    ISBN: 978-0-252-00988-4
    http://www.press.uillinois.edu/books/catalog/63fae3tq9780252008184.html
    ——

  4. 54
    John Peter says:

    Ike Solem @31

    There’s nothing “wrong” with altruistic physics, it’s just that a free market economist like Krugman does not believe it can effectively deal with climate change. So far, e.g. Copenhagen, Paul seems to be correct.

    Change we can believe in is not technical, it is political. From a physical science belief it is obvious that we must switch the energy base off fossil fuels before we destroy the climate. From a free market belief the market will switch the energy base from fossil fuels when the market is ready to do so.

    The heavily stressed marginal areas affected by climate change (so far) are in our neighbors’ back yards. Adding altruism to physical science is not enough, in Krugman and Hansen’s view, to affect the required energy switch. Krugman suggests politics as usual, Hansen prefers non-violent protest. Do you have yet another way?

  5. 55
    Doug Bostrom says:

    Dan Galpern says: 12 April 2010 at 12:18 AM

    …some Congressional advocates for C&T seem willing to trade away existing authority retained by EPA and the various states to restrict GHG emissions as pollutants under the Clean Air Act, the stakes are enormously high.

    Hmm, and once traded away, ever so hard to claw back. I suppose the point is that if political power of this kind is to be exchanged for cooperation, the thing being traded for better be worth it.

    As well, some of the actors involved in such a trade probably are not wholly committed to the objective of the trade, rather to changing the regulatory landscape, with other ends in mind.

    Dan certainly caused my eyebrows to shoot up.

  6. 56
    Leonard Evens says:

    Re: S. Molnar’s comment about `who’ vs. `that’. My wife (a computational linguist) tells me that `that’ is acceptable in the relevant sentence. The issue is whether or not ‘need to know how to write’ is a restrictive or non-restrictive relative clause, i.e., whether or not the clause is necessary for the sentence to have its intended meaning. She, and I, would tend to use `who’ in that context, but `that’ is also `correct’.

    Of course, what is `correct’ changes over time. there is a similar distinction between `which’ and `that’, which she tells me is thought to be a recent invention. In particular it was not followed by Wordsworth and Shakespeare.

  7. 57
    Hank Roberts says:

    More market options may be all they’ll offer or imagine could be possible
    That doesn’t mean that’s what will work or what’s needed.
    Look at the financial markets.
    There’s no irony like history.

    Felix Frankfurter (November 16, 1934) to William O. Douglas:

    “… you’ll put the whole prestige of the federal government behind financial transactions that are too complicated or supported by too much power to be stopped by the officials that would pass on them. It’s awfully easy to write these nice laws for control. I think your lawyer-banker friends would write them for you.” He concluded, “tax ‘em, my boy, ‘tax em.”

    from
    “The Rhetoric and Reality of the American Dream: Securities Legislation and the Accounting Profession in the 1930s”
    Barbara D. Merino Alan G. Mayper
    It was originally found at http://panopticon.csustan.edu/cpa99/html/merino
    in various versions at various sites.
    It is now paywalled: http://dx.doi.org/10.1006/cpac.2000.0432

  8. 58
    zeroworker says:

    I have a two bones to pick with Krugman’s article, and then a final comment:

    1) His treatment of the DICE model of William Nordhaus. He uses this as an example of how folks have tried to estimate the costs associated with letting climate change proceed apace without mitigation. But these kinds of studies should not be taken seriously.

    The level of warming at which an ecological and/or climate tipping point is triggered is virtually impossible to predict with a high degree of confidence, so these models invariably ignore them entirely. Otherwise they could not get an answer out the other end. But the real danger of climate change is precisely the triggering of such tipping points, which can cause extraordinary economic damage if they occur.

    For example – the world’s coral reef systems appear to be seriously stressed by the amount of warming that has already occurred. Coral reefs are very productive – what happens if the reef systems are destroyed? Who knows? And that’s the point – it’s a guess. We can’t know how much warming the reefs can take until they die, nor can we well predict the impact on the world economy, although the potential for large losses is obvious. Trying to incorporate these kinds of dynamics would render the exercise of attaching a cost to warming impossible, so such non-linearity is ignored, thereby rendering the model useless.

    These models are quite simply a joke, and should not be part of the debate. To assign the cost of warming of 4.5 degrees F at 2% of global world product is simply absurd.

    [Response: For what it's worth, as a non-economist, I agree with you completely. David]

    2) His assumption of future economic growth out to 2050 of around 2.3%. This is fantasy, not a prediction of future reality.

    I’ve already touched upon the potential for catastrophe that climate change poses for the world economy. But we have to add to that the other threats to growth which we are rapidly approaching – depletion of non-renewable resources, unsustainable exploitation rates of renewable resources, and the trashing (literally) of the biosphere. I’m talking peak oil, peak coal, declining water tables, soil erosion, the great garbage patch in the Pacific ocean, etc.

    This all boils down to the fact that the earth is finite. Just like the atmosphere is not capable of absorbing an infinite amount of CO2 emissions without changing the global energy budget, there is only so much oil and coal in the ground to extract and burn to power our economies. Only so much toxic sludge and agricultural runoff that the ocean can absorb before they result in dead zones, etc.

    The economic assumption of perpetual growth is about to run smack dab into planetary limits. The growth that Krugman takes for granted in his article will not materialize. In fact, it’s quite likely, even assuming that climate change will have no ill effects on the world economy, that global production will be SMALLER in 2050 than it is today.

    3) I like Krugman. He looks at evidence before forming conclusions. He is far, far better than most of our country’s current high profile public intellectuals and talking heads. He’s got integrity and tries to think things through.

    Still, he just can’t seem to break out of the standard economic thinking at times. At one level, who can blame him? He is an economist, after all. But traditional economics is simply no longer a helpful lens through which to view the world and understand our current predicament.

    Modern economics came of age and matured in a world of cheap, abundant energy, a world in which the earth essentially was an infinite source of resources and an infinite sink for our pollution. But the human ecological footprint is no longer small in relation to the carrying capacity of the planet. In a world of expensive and declining energy supplies, of contaminated spaces, growth can not continue, and the economist does not have much to say that is helpful unless he/she is willing to revisit some of the past assumptions of the discipline. Some economists (ecological economists) are doing that – Charles Hall, for instance, is one that I know of. Krugman, despite all of his strengths, is not yet in that camp.

  9. 59
    floundericiousWA says:

    (off topic)

    http://www.youtube.com/watch?v=JfA1LpiYk2o&feature=channel

    Check out Peter Sinclair’s latest “Climate Crock of the Week” and he really obliterates Lord Monckton

    He’s apparently doing a live webcast on this Thursday April 15th.

  10. 60
    John Peter says:

    Hank Roberts @53

    Krugman from a couple of years back on APO.
    http://krugman.blogs.nytimes.com/2008/04/15/oil-numbers/

  11. 61
    Georgi Marinov says:

    Kevin McKinney @ 51:

    That said, I think Ike really has put his finger on a central point when he brings up the question of the limits to growth. He’s not the first, of course, but the discussion of this doesn’t seem to me very widespread, though it’s ever more urgent. Conventional economic theory does posit unlimited economic growth as normative and desirable–and it does seem to me that the physical possibility of this paradigm is at best undemonstrated. Very possibly Ike is right that the academic culture of economics contributes to the neglect of this question, by failing to insist on better training in the physical sciences.

    The central question to me seems to be, is economic growth possible within tight physical constraints? In principle, I’d think it should be, given that many goods and services are relatively intangible, and don’t obviously require increased physical inputs in order to increase in value. And of course we’ve seen instances of technology actually decreasing physical inputs while increasing utility.

    It is not possible, because nobody has yet found a way to decouple economic growth from consumption of physical stuff – you can have people shuffling numbers on a computer screen but you still have to feed those people.

    That said, this is only half of the problem, the other part is population growth. How much resource use grows is determined by population growth and economic growth. Clearly, you can’t have resource use grow forever, in fact you can’t have it be constant either because they are non-renewable. Which means that we either have to conserve to the extreme until we find substitutes or there will be no civilization in a few hundred years at most. And conservation means drastic reduction of population and unneeded consumption plus maximum recycling, but recycling is never 100% possible.

    Of course, we have an economic system that not only posits, but requires unlimited growth to simply exists, and without growth it falls apart. Why is that is what any sane human being would ask given that even with the current economic downturn there is absolutely no reason why anyone should starve – there is enough food and fuel for everyone to be fed, housed and clothed. There isn’t enough for everyone to have an SUV, a McMansion and a vacation somewhere 10,000 miles away though, and there will not be enough even for food for everyone in the not so distant future, which means we have to downsize.

    All of the above should tell you how meaningful the whole disciple of economics is. You can’t claim to have priority over decision making if you fail to account on the most basic level for the fact that you live in a world governed by the laws of physics first, but this is exactly what’s happening

  12. 62
    David B. Benson says:

    Regarding the PETM so-called mass extinction. While that period maybe had a normal rate of extinctions, I dunno, an entire order of mammals became extinct; such cannot have happened very often: “There are 19 orders of mammals in the world.” from
    http://www.cftech.com/BrainBank/OTHERREFERENCE/ANIMALWORLD/OrderMammals.html

  13. 63
    John Peter says:

    zeroworker @58

    You need to update your “facts”

    1- Paleo-climate tipping points have been established recently by Hansen and others.

    2- Krugman says in the NYT piece we are supposed to be discussing:

    “…What has caught on instead is a variant that most economists consider more or less equivalent: a system of tradable emissions permits, a k a cap and trade. In this model, a limited number of licenses to emit a specified pollutant, like sulfur dioxide, are issued. A business that wants to create more pollution than it is licensed for can go out and buy additional licenses from other parties; a firm that has more licenses than it intends to use can sell its surplus. This gives everyone an incentive to reduce pollution, because buyers would not have to acquire as many licenses if they can cut back on their emissions, and sellers can unload more licenses if they do the same. In fact, economically, a cap-and-trade system produces the same incentives to reduce pollution as a Pigouvian tax, with the price of licenses effectively serving as a tax on pollution…”

    How you interpret that to mean Krugman and other Pigouvian economists depend on unlimited resources beats me.

    3- Before damning with faint praise, I suggest you try reading the article you are supposedly reviewing.

  14. 64

    New ‘Climate Minute’ Video: The Greenhouse Effect

    #23 Ike Solem

    I have made the argument to answer the question of market forces vs. subsidized development, though I should refine the statements:

    5) Shouldn’t we concentrate on enabling new technologies and businesses to develop needed technology and methods to solve this problem by enabling market forces to drive solutions?

    • Fee & Dividend provides the best of both worlds. A progressively increasing fee drives incentive to develop new technologies and methods to achieve the goal of reduce greenhouse gas emissions.
    1. By avoiding subsidizing the development we avoid allowing the policy to become a political football that politicians and corporations will fight over.
    2. Reducing the fight over funds reduces the inefficiency of political corporate development.
    3. Anyone that is even slightly familiar with the ability of government and corporate subsidy knows that it generates a large bulk of competing proposals that are lobbied at policy maker level by the corporations that want the money. This typically causes many less efficient, less effective, and sometimes even absurd technologies to be developed with taxpayer money. More often than not, these technologies are ineffective.
    4. Reducing or eliminating the subsidy impels the corporations to only develop solutions that will be meaningful to the market reality. That saves the taxpayers money and produces better solutions. Don’t be fooled.

    My main point here is that allowing the politicians access to the fee distribution to renewables increases the risk of ineffective expenditure that is caught up in the mire of special interest funding that is the lure of all politicians in the bait and switch of campaign finance and influence of political position.

    Allowing the market forces to drive the innovation gleans the fat from the equation. this in turn enables more highly efficient and effective methods and solutions. Unfortunately we can not afford as much waste as we have become accustomed to at this juncture.

    There is no one way though and we need to consider political reality as well as dire need.


    VIDEO: A Climate Minute
    The Greenhouse Effect
    History of Climate Science
    Arctic Ice Melt


    Our best chance for a better future ‘Fee & Dividend’
    Understand the delay and costs of Cap and Trade
    http://www.climatelobby.com/fee-and-dividend/
    Sign the Petition!
    http://www.climatelobby.com

  15. 65
    John Peter says:

    post #26 to Paul Krugman’s POA blog:
    http://krugman.blogs.nytimes.com/2008/04/15/oil-numbers/

    “…There are no solutions for this that include the current levels of population and standard of living, let alone any growth in either. And that is simply an unacceptable conclusion to everyone.”

  16. 66
    David B. Benson says:

    Re my comment #62: I disremebered and failed to check. Some families of mammals became extict during PETM; not so unusual. The only order of mammels to become extinct (so far) is
    http://en.wikipedia.org/wiki/Category:Multituberculates
    in the early Oligocene.

  17. 67
    John Peter says:

    I’ve always claimed the internet is a dangerous place. I received the following a few minutes ago. Names have been removed to protect the (not so) innocent:

    ——– Original Message ——–
    Subject: FW: OUR OWN OIL – You better sit down before reading this one….
    From:
    To:
    CC:

    OIL

    Here’s an interesting read, important and verifiable information :

    About 6 months ago, the writer was watching a news program on oil and one of the Forbes Bros. was the guest. The host said to Forbes, “I am going to
    ask you a direct question and I would like a direct answer; how much oil
    does the U.S. have in the ground?” Forbes did not miss a beat, he said, “more than all the Middle East put together.” Please read below.

    The U. S. Geological Service issued a report in April 2008 that only
    scientists and oil men knew was coming, but man was it big. It was a
    revised report (hadn’t been updated since 1995) on how much oil was in
    this area of the western 2/3 of North Dakota , western South Dakota , and extreme eastern Montana …… check THIS out:

    http://bakkenshale.net/bakkenshalemap.html

    The Bakken is the largest domestic oil discovery since Alaska ‘s Prudhoe
    Bay, and has the potential to eliminate all American dependence on foreign
    oil. The Energy Information Administration (EIA) estimates it at 503 billion barrels. Even if just 10% of the oil is recoverable… at $107 a barrel, we’re looking at a resource base worth more than $5..3 trillion.

    “When I first briefed legislators on this, you could practically see
    their jaws hit the floor. They had no idea..” says Terry Johnson, the Montana Legislature’s financial analyst.

    “This sizable find is now the highest-producing onshore oil field found
    in the past 56 years,” reports The Pittsburgh Post Gazette. It’s a
    formation known as the Williston Basin , but is more commonly referred to as the ‘Bakken.’ It stretches from Northern Montana, through North Dakota and into Canada .. For years, U. S. oil exploration has been considered a dead end. Even the ‘Big Oil’ companies gave up searching for major oil wells decades ago. However, a recent technological breakthrough has opened up the Bakken’s massive reserves…. and we now have access of up to 500 billion barrels. And because this is light, sweet oil, those billions of barrels will cost Americans just $16 PER BARREL!

    That’s enough crude to fully fuel the American economy for 2041 years
    straight. And if THAT didn’t throw you on the floor, then this next one
    should – because it’s from 2006!

    U. S. Oil Discovery- Largest Reserve in the World

    Stansberry Report Online – 4/20/2006

    Hidden 1,000 feet beneath the surface of the Rocky Mountains lies the
    largest untapped oil reserve in the world. It is more than 2 TRILLION
    barrels. On August 8, 2005 President Bush mandated its extraction. In
    three and a half years of high oil prices none has been extracted. With this motherload of oil why are we still fighting over off-shore drilling?

    They reported this stunning news: We have more oil inside our borders,
    than all the other proven reserves on earth. Here are the official estimates:

    - 8-times as much oil as Saudi Arabia

    - 18-times as much oil as Iraq

    - 21-times as much oil as Kuwait

    - 22-times as much oil as Iran

    - 500-times as much oil as Yemen

    - and it’s all right here in the Western United States .

    HOW can this BE? HOW can we NOT BE extracting this? Because the
    environmentalists and others have blocked all efforts to help America
    become independent of foreign oil! Again, we are letting a small group of
    people dictate our lives and our economy…..WHY?

    James Bartis, lead researcher with the study says we’ve got more oil in
    this very compact area than the entire Middle East -more than 2 TRILLION
    barrels untapped. That’s more than all the proven oil reserves of crude oil in the world today, reports The Denver Post.

    Don’t think ‘OPEC’ will drop its price – even with this find? Think
    again! It’s all about the competitive marketplace, – it has to. Think OPEC just might be funding the environmentalists?

    Got your attention yet? Now, while you’re thinking about it, do this:

    Pass this along. If you don’t take a little time to do this, then you
    should stifle yourself the next time you complain about gas prices – by
    doing NOTHING, you forfeit your right to complain.

    ——–

    Now I just wonder what would happen in this country if every one of you
    sent this to every one in your address book.

    By the way…this is all true. Check it out at the link below!!!

    GOOGLE it, or follow this link. It will blow your mind.

    http://www.usgs.gov/newsroom/article.asp?ID=1911
    <http://www.usgs.gov/newsroom/article.asp?ID=1911 >
    ************************************

    AGW may be a bit more successful than peak oil…

  18. 68
    Ron R. says:

    Question for the experts: Why is knowing the yearly rainfall total (July 1 thru July 1) seemingly a state secret? I just spent three hours on the internet trying to find it, and I’m no laggard on the net, and finally had to call the local weatherman who told me such information does not exist, HOWEVER if I really want to know I could subscribe to the local paper and add up the amounts daily or go to the local library and dig up every newspaper for the last ten months and do some adding. WTF?

    After three hours this is the closest thing I found: http://www.cnrfc.noaa.gov/awipsProducts/RNORR4RSA.php

    Unfortunately though, it only mentions a few places in my state of California.

    Okay, I suspect that someone here knows how to find it for particular localities. I’m ignorant, could you clue me in?

  19. 69
    mrtin says:

    @John Peter

    I did follow that link, and I did google it, and the numbers are nowhere near what you list. The USGS estimates that 3-4 billion barrels of oil are technically extractable (with today’s technology). That’s not a tiny number, but it is hardly going to bring OPEC to its knees.

  20. 70
    Doug Bostrom says:

    Ron R. says: 12 April 2010 at 7:48 PM

    Annual amounts also strangely lacking but monthly quantities for many, many places are available here:

    World Climate

  21. 71
    philc says:

    Re #6 and the response. I always enjoyed the electives I had to take while tackling a chemistry degree. The easy A’s and B’s in history, sociology, pscyh. etc. helped with the old GPA when competing in classes drawn from the top 10% of the high school graduating class the Institute of Technology.

  22. 72
    Thomas says:

    43: The spending your way out of a recession is standard economics 101 stuff. Recessions happen because the demand for goods is less than the economies ability to produce, and people start getting laid off, plus profits drop. Then others who still have jobs and income cut back on spending just in case. Without demand for goods economic activity (jobs) severely contracts. Savings in and of itself is not a net good for society, investment in useful productive capacity is. Physical investment requires both savings, and the (usually profit driven) incentive to spend the saved funds on productibe assets. But during a recession funds are simply hoarded, not invested in future productive capacity. This is done both because of fear (if I lose my job I might need that money), and lack of confidence that the investment will pay off (uncertainty about future demand).
    Now, you may be legitimately concerned with ecological-economics, we are clearly spending down our eco-capital, and that has to be reversed. The problem with the standard economics is the assumption of exponential growth, which we know can only ocurr for a finite time interval.

    (67) You are listening to exaggerations and half truths. The Bakken shale is very low permeability, and it is pressure driven flow through a permeable medium that determines flow rate (and the economics of production). Low permeability implies very low flow rates from wells, and that adversely affects the economics of producing it. The Bakken is not a recent discovery (I had a crud lob sticking geophones in the ground (seismic surveys) for that play back in 77). Production has been gradually ramping up, but until very recently rather slowly. The combination of better horizontal wells, and hydrofracking has improved in the last year or so, so that production is only now increasing rapidly. Conservatives try to blame tree huggers for everything, but in this case it was techical and economic constraints on the ability to recover this oil. Even with the rapidly advancing technology, we shouldn’t count on getting more than a few percent recovery. It is still a bright spot for domestic oil, if we can get a million barrels per day from the Bakken, and a similar amount from new offshore drilling, we can probably maintain roughly our current rate of domestic production (about half the 73 peak) for perhaps a decade or two.

  23. 73
    Doug Bostrom says:

    John Peter says: 12 April 2010 at 7:38 PM

    That sounds like the same Forbes who will sell you the plans for the magnetohydrodynamic fuel filter that gets you 241 gallons per mile in your 1967 Buick, the one you could buy if only the oil companies had not bought the patent.

  24. 74
    flxible says:

    JohnPeter@66 – That is old “news”, it got some contrarions all aflutter a couple years ago. As mrtin points out the extractable amount estimated in the Bakkan formation is less than 4 billion barrels – that would be about a 6 month supply for the US, IF every drop of it proves out. And that production would be spread over 20 years or more. And it would mess up a lot of water in the process. Get better information here and send an answer to your fanciful email friend including that link.

  25. 75
    philc says:

    Re 13. I find the reference to http://environmentalintegrity.org/pdf/publications/Dirty_Kilowatts_2007.pdf interesting. According to this paper the SO2 reductions in coal powered plants didn’t result in any real decreases until 2006. How is it that the sulphate aerosols reductions from these plants have been identified as the cause of cooling in the ’70′s and early 80′s.?

    The argument that a “small” tax on carbon applied to subsidize new source renewable energy is a bit disingenuous. The net effect is to replace low cost sources of energy with high cost sources of energy. Regardless of how the new sources are funded, they still are more costly. What it does do is shove the costs downstream, much like deficit spending. The money has to come from someone. Subsidized alcohol from corn is a good example. When all is said and done, it is at best carbon neutral in fossil fuel terms, cost a lot of money, and raised prices of food across the world, leading to famine and starvation among those least able to afford it. We can’t afford too many mistakes like that again.

    The first question to ask is: are there any renewable energy sources that are fossil carbon neutral? What do they cost? Do they have any hope of becoming cost competitive with fossil carbon? Nuclear is one option, although the plants are very expensive because the best developed option(light water reactors)have to be built very big. But they last many years and operators have shown that they can be rehabbed and rebuilt at much less cost than building new, so the plant can essentially last forever. Solar panels are relatively expensive, but they do, over their lifetime produce significantly more energy than it takes to make them. On the downside they need base load capacity and or storage facilities to balance out the energy production. Probably the best candidate I’ve seen is the cyanobacteria that makes petroleum as it’s storage fat. The native strains are too slow growing to be economic right now, but that will be fixed if it is energetically possible(the enzyme processes may not be able to be made more efficient when producing something as energy dense as petroleum). But the candidates for replacement of coal and oil are slim in the foreseeable future.

    BTW, I think the US should be in line for some praise. In several reports I’ve seen, the continental US is now a net carbon sink.

  26. 76
    david says:

    @mrtin, possibly John Peter is suggesting that the internet is a dangerous place because of rubbish like the stuff on US oil he had just received.

    Incidentally, even if a trillion barrels of oil suddenly bubbles up on the white house front lawn, it would only delay peak oil by at most 20 years, probably less once the price plummets and China, India etc start using at US rates.

  27. 77
    Georgi Marinov says:

    John Peter @ 67:

    Two things:

    1. EROEI (hint: very low for shale, tar sands and anything that has to be extracted from rocks with very low porosity such as the Bakken)

    2. Technically recoverable resources (second hint: only a tiny fraction of the original oil in place)

    Just a little bit of oil geology literacy is needed to appreciate these things

    mrtn @ 69:

    The USGS estimates that 3-4 billion barrels of oil are technically extractable (with today’s technology). That’s not a tiny number, but it is hardly going to bring OPEC to its knees.

    It’s not a tiny number, this is correct. However, to put in perspective, the world uses 30 billion barrels of oil every year. The US alone uses twice those 3-4 billion barrels every year. So it’s 6 months supply

    The combination of wishful thinking plus total ignorance about the actual numbers involved provides a fertile ground for such myths

  28. 78
    Georgi Marinov says:

    That’s enough crude to fully fuel the American economy for 2041 years
    straight.

    Oh, and also, I have to comment on this:

    Even if somehow magically that much oil came into existence out of nothing, it would not power any economy for 2041 years. For two reasons:

    1. If we want a stable world, it will be global demand that will determine how much of that oil will actually be used in the US and how much of it will be exported – the best example is the UK which could have hoarded its North Sea oil and gas but instead exploited it as fast as it could, selling it to the world markets and as a result after its peak, it is becoming a net importer of gas and oil now. Unless the dominance of free market ideology is to stop in the US (hard to see it happening given that it is an even bigger religion than Christianity here), such hypothetical US oil will be extracted and sold to oil-thirsty China and India as fast as it could be

    2. Which is related to the second point: Any calculation of how much resource there is left based on current consumption is completely meaningless because it ignored the fact that demand will be growing in the future. The IEA was projecting 120 million barrels of oil a day demand (and supply) two or three decades from now before the reality of Peak Oil forced them to start gradually reduce that number each year (as it became clear that this supply will never come into existence). Of course, it is highly unlikely that we will ever pass 90 million barrels of oil a day production, but this is what the demand would look like if the oil was available. And it would not stop there.

    BTW, I don’t know where you got the 2041 years number from, this would imply some 15-20 billion barrels of original oil in place in the Bakken shale, which is simply not true, but even if this was true it would not be 2000 years, it would be a lot less than that, due to exponential growth in consumption.

    People always forget about growth, to their peril

  29. 79
    John Peter says:

    Without pointing fingers, let me state that comments posted here to the effect that economic theory and/or economists favor unlimited growth are ignorant hogwash.

    Economics comes in two flavors, microeconomics which deals with needs and macroeconomics which deals with the distribution of limited resources. Basic to economic theory is the law of diminishing returns; “Sometimes referred to as variable factor proportions, law of diminishing returns states that as equal quantities of one variable factor are increased, while other factor inputs remain constant, ceteris paribus, a point is reached beyond which the addition of one more unit of the variable factor will result in a diminishing rate of return and the marginal physical product will fall.” which would seem to imply limits to just about anyone who reads it.

    The 20 voluntary National Standards for Economics, made available by the National Council on Economic Education(NCEE), comprise an organized list of economics topics suitable for grades 1-12. The NCEE’s 51 key economics concepts focus on the portion of that list common to all U.S. State requirements for high school economics. One of these, economic growth, is described: “Economic growth occurs whenever people take resources and rearrange them in ways that are more valuable. A useful metaphor for production in an economy comes from the kitchen. To create valuable final products, we mix inexpensive ingredients together according to a recipe. The cooking one can do is limited by the supply of ingredients, and most cooking in the economy produces undesirable side effects. If economic growth could be achieved only by doing more and more of the same kind of cooking, we would eventually run out of raw materials and suffer from unacceptable levels of pollution and nuisance. Human history teaches us, however, that economic growth springs from better recipes, not just from more cooking. New recipes generally produce fewer unpleasant side effects and generate more economic value per unit of raw material….”
    Economic growth is definitely resource limited; economics consists of trying (through technology) to make the best of what we have.
    In concert with trying to teach some physical science to many of our economists perhaps we might try to teach some economics many of our physical scientists.

  30. 80
    Ron R. says:

    Thanks Doug (#70). Still that’s not quite what I had in mind. Those look to be average rainfalls for particular areas. What I am hunting for are up-to-date totals for the rain year. We’ve had so much rain since October that I was trying to see what it came to.

    It’s a conspiracy I tell ya! ;-)

  31. 81
    Ron R. says:

    Hmmm, perhaps this is it:

    http://www.cnrfc.noaa.gov/monthly_precip.php

    But the figure is gives is out of whack (by about six inches) from the number the weatherman told me (which he says he gets from a private source).

    OK, now that I’m officially OT, here’s a link that I thought others here might appreciate:

    http://www.orgonelab.org/cart/yweather.htm

    I actually put up a weatherstick the other day, which I read somewhere is possibly made from a balsam fir Abies balsamea tree, apparently it’s a trade secret, and it does indeed respond to the weather. I’m no so sure yet whether it actually responds ahead of time though.

  32. 82
    John Peter says:

    mrtin@69 Thomas@72 Doug Bostrom@73 flxible@74

    Thanks guys,

    I won’t buy the stock. The email is based on a get rich quick oil gamble from 4 years back. Today’s investment touter claims “..You see, the Bakken isn’t just an exploration gamble anymore. That time has passed. In fact, it is now being developed at an incredible pace. According to state officials, production could reach almost half a million barrels before 2015…much closer to reality – Thanks Thomas

    David@76 is correct, I received the email earlier today, including the reference to the 2006 report of 4 years ago. The sad fact is that the email (dissing environmentalists) is still being passed around. Almost as long lived as CO2.

    According to Jim Hansen (grandchildren pg 203) he had an email problem with the “Union of Concerned Scientists” – BTW nary a scientist on their board – refusing to give Jim their member list. They had emailed a critical mis-characterization of one of Jim’s Kyoto papers. Tough.

    Isn’t it amazing the crap that floats around the internet. Watch your backs, emails are cheap and can do a lot of damage.

    Almost makes the MSM look like pussy cats – whatever.

  33. 83
    flxible says:

    philc@75 “BTW, I think the US should be in line for some praise. In several reports I’ve seen, the continental US is now a net carbon sink.”

    You wish. Too bad those reports concern the natural processes of the continent, not the behavior of it’s residents.

  34. 84
    Edward Greisch says:

    Experiment: You put some bacteria and some sugar into a test tube and seal it. The population of bacteria grows exponentially until the sugar is gone. Then all of the bacteria die. WE are the bacteria.

    53 Hank Roberts: Reference: “Now or Never” by Tim Flannery 2009
    page 2: We have already exceeded Earth’s carrying capacity by 25%
    We can hope that C is the correct answer. If you study population biology, you will see that most populations of organisms oscillate. The alternative is to crash to zero. Crashing to zero keeps becoming more probable. Do not imagine that we are somehow better than other species.

    The only way to continue expansion is to expand into space some time ago. A small colony in space may save us if “late comers” are unable to reach the colony. Late comers would overload and destroy it. Colonies thru-out the outer solar system could support 100 Billion people eventually, but not now, and not average people. Once we make the leap to space big, we can take the entire galaxy, eventually, but not in a time of crisis. Space is a harsh environment and space will force evolution.

    54 John Peter: Another way: The opposite of altruism is more “altruistic” to the species. The escape route must be destroyed once the colony on Mars is big enough to sustain itself and before it becomes overcrowded. A thing is its opposite: Bad is good. A pandemic could save us. A colony on Mars cannot support more than a very few highly capable people. The environment on Mars can support ZERO people at the moment. If we can make it support a few, a few more will kill it. Neither politics as usual nor non-violent protest is likely to accomplish anything. Hansen should run for the US senate. Our present system, plutocracy, cannot last long. But how to change it and to what I don’t know right now. If we had 67 scientists in the senate, it might work.

    58 zeroworker is correct in saying “traditional economics is simply no longer a helpful lens through which to view the world and understand our current predicament.” Forget about the economy. Civilization is likely to collapse, and soon. Economic theory will be forgotten in the collapse.
    Reference: “Heart of Dryness” by James G. Workman, 2009, page 40: “The Sahara keeps moving south at thirty miles per year. … Each year, China loses a Rhode Island-sized parcel of fertile land to desert;”. The end of food is the end of civilization.

    Why do you suppose E.T. has not arrived? Answer: ETGW

  35. 85

    FYI on Peak Oil

    Joint Operating Environment
    Joint Forces Command

    Energy section begins on page 24

    http://www.jfcom.mil/newslink/storyarchive/2010/JOE_2010_o.pdf


    A Climate Minute The Greenhouse EffectHistory of Climate ScienceArctic Ice Melt


    Our best chance for a better future ‘Fee & Dividend’
    Understand the delay and costs of Cap and Trade
    http://www.climatelobby.com/fee-and-dividend/
    Sign the Petition!
    http://www.climatelobby.com

  36. 86

    I was under the impression that non-global Cap & trade schemes as suggested by by Krugman had been discredited.

    Of the businesses that are involved, these subject governments to intense politically lobbying which then over-subscribe free carbon allowances which lead to windfall profits for the companies involved. Worse still, participants are allowed to import goods and outsource labour from non-complaint countries that do not subscribe to carbon limits at all. They are also allowed to offset their emissions there, effectively paying developing countries to reduce emissions so they can increase theirs, but this sometimes results in payments for projects that might had happened anyway! The net effect is an increase of consumer energy prices whilst having virtually no influence on reducing the rate of increase in global carbon emissions.

    Other market-based schemes are claimed to be superior to the EU trading system. However, any scheme is only as effective as the loopholes. Any successful mechanism must be global in scope, with the limits or tax levels dictated by the environmental objectives free from business lobbying or political pressure.

  37. 87

    Deech (32),

    I’m going with people from CREDO today to talk to some of Senator Casey’s staffers. The thrust is to get the senator to support letting EPA regulate carbon dioxide. Wish us luck.

  38. 88

    AA (43),

    The stimulus package appears to have worked, if you go by empirical evidence. It was exactly the type of situation that calls for a Keynesian stimulus–high unemployment, low capacity, prices stagnant or falling. By increasing aggregate demand, production ramped up. It worked. Inflation hasn’t gotten any worse than it was. In some situations, extra spending is EXACTLY what the government should do. It just shouldn’t do it in all cases, e.g. when employment is high and inflation is a problem.

  39. 89

    philc (75),

    You’re forgetting wind and solar thermal power.

  40. 90
    simon abingdon says:

    #19 VS was so far out of his depth as to be laughable

    #20 VS’s approach doesn’t seem to hold up

    #21 VS is a persistent crank who will keep talking as long as there’s an audience

    #26 For those wondering what it’s all about, you may choose to skip over the 1,500 comments RiHo08 mentions and instead cut to the chase at Tamino’s site as linked by Ray Ladbury (http://ourchangingclimate.wordpress.com/2010/03/01/global-average-temperature-increase-giss-hadcru-and-ncdc-compared/

    On the other hand, you may want to make up your own mind by reading the thread in question, because (for example):

    #29 Please see our work on applying cointegration analysis and other time series econometrics to the climate issue which has largely (but not totally) been ignored by the climate science community.

    #46 While Bart Verheggen (the ourchangingclimate blog host) understandably adopts a “physics trumps econometric statistics” position, I’d be surprised if he wasn’t uncomfortable with the comments above from #19 and #21.

  41. 91
    simon abingdon says:

    In my last post
    “(http://ourchangingclimate.wordpress.com/2010/03/01/global-average-temperature-increase-giss-hadcru-and-ncdc-compared)” should appear after “thread in question” not after “Ray Ladbury”. Sorry.

  42. 92

    John Peter #67: The worst thing about your Bakken story is the link at the end of the article takes you to USGS where the figure for recoverable oil is only “3.0 to 4.3 billion barrels”, and this is in the first sentence.

    Beware of posting or sending on stuff that arrives in your inbox without verifying.

  43. 93
    John E. Pearson says:

    75: philc says: “How is it that the sulphate aerosols reductions from these plants have been identified as the cause of cooling in the ’70’s and early 80’s.?”

    Say what?

  44. 94
    Frank Giger says:

    From page one of the article:

    “In fact, once you filter out the noise generated by special-interest groups, you discover that there is widespread agreement among environmental economists…”

    Um, aren’t environmental economists a special-interest group? Or are they just the only ones not making “noise?”

    Thank goodness the accountant from Greenpeace is here – we were just getting static from the other guys.

  45. 95
    David Miller says:

    Simon, by what mechanism would you suggest statistics should change the underlying physics?

    If the result of some repeatable physical process happens to form some statistical anomaly (root unit) that supposedly invalidates the physics, which do you think is right? How can some after-the-fact way of looking at the data change what was actually observed to happen?

    It’s pretty annoying to hear deniers claim “all you’ve got are models, you don’t have any real world data” and then rally around someone who says “Never mind the data, this model says it’s invalid”

    Bart has it right, physics trumps statistics.

  46. 96
    John Peter says:

    Edward Greisch@84

    I like your “colony on Mars” example. Hansen uses Mayflower II coming to earth in 2025 from Claron, 40 light years away. So much for the escape route.

    I’d always believed that the opposite of “altruism” was “greed”. I would hope your Mars settlers could leave greed behind, but I’m not sure how. A challenging view by Paul Berman can be found at http://demosophia.mu.nu/archives/169849.php

    As far as Senators are concerned, to paraphrase Winston Churchill, “The best argument against democracy is a five-minute talk with the average voter”. Substitute “scientist” for “voter”.

    58. Sorry, there is no “economic” assumption of perpetual growth. Mathematical, astronomical, physical perhaps – but not economical.

  47. 97
    John Peter says:

    Stephan Latham@86

    I thought Krugman fixed the number of licences and let their price vary.

  48. 98
    John Peter says:

    Phillip Machanick@92

    Point well taken. I’ll try to do better in the future

  49. 99
    SecularAnimist says:

    Paul Krugman wrote: “In fact, once you filter out the noise generated by special-interest groups, you discover that there is widespread agreement among environmental economists”

    Frank Giger wrote: “Um, aren’t environmental economists a special-interest group? Or are they just the only ones not making noise? … Thank goodness the accountant from Greenpeace is here – we were just getting static from the other guys.”

    With all due respect I think you are having a programmed knee-jerk response to the word “environmental”.

    As in “environmentalist = dirty hippie”.

    Do you really think an “environmental economist” is “an accountant from Greenpeace”?

    Do you know anything about the discipline of environmental economics?

    Environmental economics is a subfield of economics concerned with environmental issues. Quoting from the National Bureau of Economic Research Environmental Economics program: “Environmental Economics [...] undertakes theoretical or empirical studies of the economic effects of national or local environmental policies around the world [...]. Particular issues include the costs and benefits of alternative environmental policies to deal with air pollution, water quality, toxic substances, solid waste, and global warming [...]”

    The main academic and professional organizations for the discipline of Environmental Economics are the Association of Environmental and Resource Economists (AERE) and the European Association for Environmental and Resource Economics (EAERE). The main academic and professional organization for the discipline of Ecological Economics is the International Society for Ecological Economics (ISEE).

    Maybe those are the folks that Krugman is talking about, not “accountants from Greenpeace” … ya think?

  50. 100
    simon abingdon says:

    #95 David Miller

    “Simon, by what mechanism would you suggest statistics should change the underlying physics?”

    Nothing changes the underlying physics, but it could be that econometrics applied to actual observations might provide illumination in areas where the inferences from physics are uncertain (clouds, oceans, etc). Chaos is not an easy subject.

    Any scornful dismissal of the possible usefulness of statistical mathematics in climatology may be premature, and unworthy of a scientist.


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