Articles by Gar Lipow

Higher productivity and lower health costs outweigh additional spending

Grist has discussed the consensus among most economists that the net cost of solving the climate crisis will be around 1 percent of gross domestic product (GDP). Basically this consensus says that total expenditures in various greenhouse gas emitting sectors will increase by 1 percent for the same economic output if emissions are controlled.

To be fair to economists, these estimates are based on studies that include substantial increases in energy efficiency -- even count some of the maintenance and capital savings. They are actually taking a stab at following Amory Lovins' dictum to count all costs and benefits.

Nonetheless, I think there are some good reasons why the consensus is wrong about there being a net cost at all. I think the overwhelming evidence is that a climate-stable future will have a higher GDP, even before avoided climate disruption is counted.

The main extra benefits economists overlook are the helpful side effects other than mitigating the climate crisis -- "positive externalities," in economic jargon.

For example, about half of all economic activity takes place in climate-conditioned buildings. Greening these buildings could increase[PDF] productivity [PDF] by around 10 percent. Similarly, switching most long-haul freight trucking miles to long-haul freight rail would increase productivity in transportation. Many energy-saving practices in industry, such as reducing scrapping and reducing spills and other types of emitting stoppages, would increase productivity as well. A switch to wind and solar would reduce labor productivity in the electricity sector; the conventional wisdom is that a switch to organic agriculture would do the same in that sector, though I think this is much less certain that people think. At any rate, sectors where productivity would rise greatly outnumber the tiny sectors where it might fall -- resulting in a huge net increase, probably greater than 5 percent for the economy as a whole.

Another example would be huge benefits to health. Eliminating or greatly reducing the use of fossil fuels would reduce air pollution, water pollution, and exposure to toxics. A switch to organic and low input agriculture would decrease direct ingestion of toxics, and increase available vitamins and minerals in food. Whether such a switch alone would encourage a switch to healthy increase in the consumption of non-starchy vegetables and fresh fruits I don't know, but it certainly could be part of policy that accomplished this. Overall, I think it is almost impossible that switching from fossil fuels to renewables and efficiency, that switching from toxic soil-consuming agriculture to non-toxic soil building agriculture, from unsustainable to sustainable forestry, would not increase GDP.

Two last points.

Since the Kyoto ETS went into effect, traded emissions have risen

From 2005 through 2007, emissions from within facilities covered by the Kyoto Emissions Trading Scheme have risen by around 1.8 percent. (If we adjust for facilities entering and leaving the system, which I'm not sure we should, that total would be more like 1.6 percent.)

This rise in emissions happened in spite of the fact the E.U. emissions as whole have fallen. This is not a secret, exactly, but when people talk about instituting cap-and-trade in the U.S. it is worth remembering this is not a case of taking something that worked, just not as well as we like, and making it better. Phase I of European cap-and-trade was a failure.

Big is beautiful if it breaks our dead-dinosaur addiction

I've heard arguments lately for local photovoltaic solar power (PV) from rooftops, roadways, and parking lots as a primary source of electric energy, mostly accompanied by arguments against long distance high-voltage transmission lines (HVDC). I keep picturing a revised Treasure of the Sierra Madre with bandits telling Humphrey Bogart: "Transmission lines? We don't need no stinking transmission lines!"

I think the key to this argument is whether you are satisfied with slow incremental growth in renewable energy that gradually rises to providing 20 percent of electricity use, or if you want renewable electricity use to grow large enough to displace coal, natural gas for electricity, and even natural gas for heating and oil for transport (via ground source heat pumps and electrified transport).

Let's look at data from the Carnegie Mellon Electricity Industry Center for one [PDF] PV system for one day in Prescott Arizona.

click image to zoom

Deployment precedes innovation

In energy efficiency circles, the story of Jan Schilham's 1997 redesign of a pumping system for a Shanghai carpet-making factory is famous. Schilham saved 92 percent of pumping energy and lowered capital costs by using a well-known principle: Pumping water slowly through fat, straight pipes reduces friction and saves energy relative to pumping the same volume quickly through narrow twisty pipes.

Why isn't it always done that way? Because the bigger pipes cost more than the energy saving. Schilham's insight was that energy is not the only payback. Fatter pipes lower the size of the pumps and motors required, so even with the additional plumbing expenses, total capital costs are lower. Energy savings in this context are free, or better than free.

In a narrow sense, this was an improvement in cost accounting, not technology. Nothing unknown or untested was deployed. No breakthrough enabled the lower costs -- they'd always been possible. Schilham simply counted a benefit that had been overlooked, demonstrating that a technique usually considered unprofitable actually saved money.

The key that allowed Schilham to exercise his genius was that Interface carpets had already decided to reduce its ecological footprint drastically. "Whether" had already been decided -- Schilham was worrying about the "how." Essentially he was in the position of someone complying with a standards-based efficiency rule.