I found Ted Nordhaus’s May 29 article in the Breakthrough
Journal, ‘Gaslighting Intergenerational Equity: What Policy Choices Reveal
About the Social Discount Preferences of the Climate Movement’, to be quite
insightful. Gaslighting
Intergenerational Equity | The Breakthrough Institute. Here Nordhaus points
out some poorly depicted emissions metrics debatably being misused to paint a
deceptive climate emissions narrative. It is a great article and I will
reproduce much of it here.
As noted in my
recent book summary and review of Hannah Ritchie’s book Not the End of the
World, she points out the dual nature of the idea of sustainability as
providing for the needs of the present generation while preserving the
environment for future generations.
Nordhaus points
out in the article that the climate change issue is very often depicted as an issue of intergenerational equity. A generation is considered to be between 20
and 30 years. He notes that one prevailing paradigm is that we must cut
emissions quickly for future generations. CO2 emitted to the atmosphere will
remain there helping to warm the climate for a thousand years.
Balancing the
tradeoff between current benefits and future costs is done with a metric known
as the social discount rate. This is similar to other calculated discount rates
in standard economic modeling when considering future costs. Long trends in
economic growth indicate that the people of the future will have more financial
resources to tackle climate issues than we do now just as people of the future
will have more resources to tackle other problems. Nordhaus’s uncle, the
economist William Nordhaus was a key developer of climate change economic
modeling in the 1990s. Ted Nordhaus writes:
“Applying standard economic approaches to social discounting
typically produced results suggesting that the world shouldn’t spend very much
money today to mitigate future climate change. A discount rate of, say, 3%,
applied over many decades or centuries heavily discounts future costs, even if
those costs in absolute terms are very large. Environmentalists, who believed
that far reaching action was urgently needed to mitigate climate change, were
not happy with this result.”
He also points out that that idea was challenged by the UK’s
Nicholas Stern in the 2007 Stern Report where he argues that “intergenerational
equity justified a discount rate of close to zero for assessing how much cost
governments should impose on present day consumption to avoid future climate
impacts” Debates ensued between William Nordhaus and other economists who
supported the Stern Report’s conclusions. Ted says that ‘environmental
partisans’ readily adopted the economic conclusions of the Stern Report. He
also notes that these partisans want to have it both ways – applying
market-based discount rates for clean tech like solar (which only lasts 20-30
years). Nuclear plants, which last about 80 years or more can benefit from a
low discount rate as the long lifespan more than offsets the higher upfront
costs.
The Bogus Argument That Natural Gas is Worse for the
Climate Than Coal
These partisans
are in essence utilizing an accounting trick. Ted puts it in succinct terms as
follows:
“But by far the most extreme case of talking low discount
rates in theory while advocating for high discount rates in practice has been
the analytical sleight of hand that environmental opponents of natural gas have
used in order to claim that it is as bad for the climate as coal, which has
turned the social discounting preferences of climate advocates completely on
their head.”
He goes through the 20-year global warming potential (GWP) for
methane that was made popular by environmentalist-funded Cornell professor
Robert Howarth to argue that gas was worse than coal. This 20-year GWP for
methane has been adopted by many environmentalists. What they fail to point out
is that methane does not last long in the atmosphere. While it’s GWP in the short term is indeed much higher by volume than CO2, but that CO2 will stay in
the atmosphere continuing to cause warming and the methane will be converted
into a statistically insignificant amount of CO2 after 20 years or so. That
means that much of the methane emitted in say 2000 or 2004 is no longer in the
atmosphere warming the planet, or as Nordhaus puts it:
“The reason that this matters is that while methane is a
very powerful greenhouse gas, it stays in the atmosphere for less than 20
years, then breaks down into a residual carbon dioxide molecule. It can’t
accumulate in the atmosphere in the same way that carbon dioxide does and the
residual contribution to carbon dioxide accumulation is insignificant because
the total amount of anthropogenic methane emissions is vastly smaller by volume
than carbon dioxide emissions are.”
“Today’s methane emissions simply can’t significantly affect
the climate that future generations will inherit because, except for the very
tiny amount of residual carbon dioxide it leaves behind, it is gone from the
atmosphere within 20 years. For this reason, when Howarth and others insist
that gas is as bad as coal, they are de facto utilizing a very high social
discount rate, somewhere north of 10%. Or, in less abstract terms, they are
preferring to avoid very short lived methane emissions from natural gas over
carbon emissions from coal generation that will remain in the atmosphere for a
thousand years.”
Nordhaus points to a 2019 paper in Earth Systems Dynamics:
‘A quantitative approach to evaluating the GWP timescale through implicit
discount rates.’ The abstract of that paper which follows shows that the
100-year GWP of CO2 and CH4 is a metric that is consistent with the 3.3% social
discount rate often given for intergenerational equity considerations:
“The 100-year global warming potential (GWP) is the primary
metric used to compare the climate impacts of emissions of different greenhouse
gases (GHGs). The GWP relies on radiative forcing rather than damages, assumes
constant future concentrations, and integrates over a timescale of 100 years
without discounting; these choices lead to a metric that is transparent and
simple to calculate, but have also been criticized. In this paper, we take a
quantitative approach to evaluating the choice of time horizon, accounting for
many of these complicating factors. By calculating an equivalent GWP timescale
based on discounted damages resulting from CH4 and CO2 pulses, we show that a
100-year timescale is consistent with a discount rate of 3.3% (interquartile
range of 2.7% to 4.1% in a sensitivity analysis). This range of discount rates
is consistent with those often considered for climate impact analyses. With
increasing discount rates, equivalent timescales decrease. We recognize the
limitations of evaluating metrics by relying only on climate impact
equivalencies without consideration of the economic and political implications
of metric implementation.”
This does not mean, of course, that we should not continue
to capture more leaking methane from oil & gas systems, landfills,
wastewater treatment, and agricultural sources. Indeed, we should. We should
also consider the stronger short-term effects of methane. We should, however,
not forget that methane is quite temporary compared to CO2 and that CO2 is by
far, by magnitudes, a greater risk to overall warming, especially post-20-year
warming, than methane. Nordhaus goes on to state that the only reason the
20-year GWP is used for methane is to “inflate its emissions relative to coal”
knowing that natural gas is the main energy source replacing coal around the
world.
Nordhaus also
mentions that the Biden administration’s recent decision to pause LNG
development to consider potential climate impacts is based on a new unpublished
analysis from Howarth. I have argued against Howarth’s inflated numbers for oil
& gas methane leakage rates for years since his estimates are always much
higher than numerous other studies. Many have argued that Howarth is biased.
About the LNG pause, Nordhaus writes:
“The basis for doing so was a new, unpublished Howarth
analysis claiming that leakage from natural gas export and transport facilities
resulted in emissions comparable to burning coal and featuring two hallmarks of
all of Howarth’s work—leakage rates higher than anyone else’s estimates and
greenhouse gas emissions comparisons calculated using 20-year warming impact.
The likely result, should the pause continue, will be to shift the energy mix
in Europe and Asia toward coal, as well as gas produced in Russia, Asia, and
the Middle East with significantly higher emissions intensity.”
An example of another way methane mitigation efforts are
failing now or potentially failing in the future is given with agricultural
methane from cows. He considers the effect of feed additives, which while
decreasing immediate emissions have been shown to lower the growth rates of
cows. That could change in the future and additives should still be pursued but
right now they are relatively inefficient. He explains as follows:
“A steer that gets to market in 18 instead of 34 months
produces proportionately less methane during its lifetime. The same is the case
for a dairy cow that produces 50% more milk per day. Enteric methane reduction
efforts that further reduce emissions without reducing the efficiency of beef
and dairy production will reduce emissions. But any policy or technology that
reduces emissions at the expense of productivity will generally do the
opposite, or at the very least, see significantly diminished benefits. All else
equal, a feed additive that cuts methane by 25%, for instance, but that also
reduces milk output or increases the time that it takes to get to slaughter
weight by a similar proportion won’t achieve any net emissions benefit.”
Lower efficiency means higher costs and longer times to get
the animal to market, which can advantage livestock production elsewhere that
is not as environmentally efficient (The U.S. and Canada produce livestock with
the most environmental efficiency and the least emissions). Better yet for
society and for animals, we should eat no or less meat. Or as Nordhaus puts it:
“Reducing livestock productivity in the US has a carbon
opportunity cost that comes with it, in the form of increasing livestock
production in places like Latin America where livestock systems are generally
more land intensive and very strongly associated with land use change and
deforestation. Shifting production from the US to Brazil or Argentina increases
pressure to convert more forest and grassland to pasture, which in turn results
in higher carbon emissions from the agriculture sector.”
The bottom line
is that CO2 is by far the main event in climate mitigation and even more so for
future generations since methane emitted today will be mostly or entirely gone
from the atmosphere before the next generation even appears. Thus, methane
cannot even contribute to intergenerational equity since its residence time is
less than a generation. Finally, he writes that:
“… any policy that requires the use of 20 year warming for
justification is definitionally applying a very high social discount rate to
climate policy tradeoffs and will almost certainly increase carbon emissions,
increase long-term warming, and increase economic costs to future generations
associated with that warming.”
References:
Gaslighting
Intergenerational Equity: What Policy Choices Reveal About the Social Discount
Preferences of the Climate Movement. Ted Nordhaus. Breakthrough Journal. May
29, 2024. Gaslighting
Intergenerational Equity | The Breakthrough Institute
A
quantitative approach to evaluating the GWP timescale through implicit discount
rates. Marcus C. Sarofim and Michael R.
Giordano. Earth Systems Dynamics. Earth Syst Dyn. 2018; 9: 1013–1024. . A
quantitative approach to evaluating the GWP timescale through implicit discount
rates - PMC (nih.gov)
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