Renewables and efficiency would provide more GDP than fossil fuels

The attached Excel spreadsheet takes specific technologies, the known cost of implementing them, and various scenarios for responses to such implementation and technical improvements (including no technical improvement!) and calculates costs and benefits. This is intended to be an open source model. The comment section will be used to revise the spreadsheet with links to the old versions added to the bottom of this post as revisions are made (for the sake of transparency.) There is also a Word document with a narration of assumptions.

The conclusion in this 1.0 version: Unsurprisingly, the key to eliminating emissions profitably is large efficiency increases. With maximum efficiency improvements even a scenario with (completely unrealistic) zero technical progress in efficiency or renewables would make our economy as a whole richer than if we stuck to fossil fuels. If we combine aggressive efficiency improvements with aggressive (but reasonable) improvements in technology we would end up richer by more than a trillion dollars a year. Aggressive efficiency spending which yields small reductions, unsurprisingly has poor financial payback.

Warning: There is an easy misinterpretation the data does not support -- that we can do nothing. The fact that eliminating most fossil fuel use is more profitable than continuing to use fossil fuels to society as a whole does not mean that elimination will happen without policy changes. Nor does it mean that is currently profitable to those who could make the technical changes. For example, transforming commercial office space into a green building raises worker productivity by a minimum of 4 percent. If a landlord makes that transformation, and somehow gets hold of the confidential data needed to document that productivity gain, how much can she increase rents based on those productivity improvements? If you guessed zero, you are right and win the no-prize. Incidentally, even if the building is 100 percent owner occupied, what do you think the odds are they will invest in improved lighting and ventilation for the sake of productivity improvements?

Democrats are undermining the strongest message behind climate policy

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Are the CGE models useful for predicting the effects of climate policy?

My pal Peter Dorman is looking for answers: Does the class of economic forecasting tools known as "computable general equilibrium models" (aka CGE models) have any documented track record of success?

This may seem like an arcane point, but it's quite relevant to climate policy. Government agencies throughout North America are using CGE models to forecast the economic impacts of various cap-and-trade proposals. But many academic economists -- Dorman among them -- think that the CGE models are built on sand. Says Dorman:

ASUW student body transcends State and Federal legislators

A resolution opposing current Washington State biofuel policies (website not yet updated to reflect acceptance of resolution) passed in the University of Washington Student Senate on the third of June.

The Associated Students of the University of Washington are, to my knowledge, the first legislative body in the country to take this bold step.

The following is a brief history of how it came to be:

Even U.S. government says human emissions are changing climate

The U.S. Climate Change Science Program (a.k.a. the Bush Administration) has issued a must-read report, Weather and Climate Extremes in a Changing Climate. It wouldn't be must-read or even big news if it weren't for the fact that

• Many environmentalists stopped talking about the extreme weather/global warming link a decade ago.
• The deniers, the delayers, and of course the Roger Pielkes of the world have pushed back against any claims that climate change is driving the extreme weather we see today. (as Chico Marx (dressed as Groucho) said "Who you gonna believe, me or your own eyes?")
• The media has been brow-beaten by the deniers into downplaying the connection. The journalist Ross Gelbspan has a long discussion of this in his great 2004 book, Boiling Point -- I will blog on this later.
• The Midwest is experiencing the second "500-year flood" in 13 years. (Don't worry, big media, it's all just a big coincidence like the deniers keep saying.)

Umbra on green cookware

Dear Umbra, I’m thinking it’s time to start switching out my family’s cookware. When hubby and I got legally partnered,...

What we don’t know (but think we do) about oil prices might hurt us

Predicting the future is hard. It's so difficult that even teams of analysts using fancy models get results like this:

This isn't back-of-the-envelope stuff. This is the U.S. Energy Information Administration's official prediction for oil prices, circa 2007. According to the "high price" scenario, oil may reach $100 per barrel some time around 2030. But wait: oil was at $127 last week. So, not only was the EIA projection wrong -- it was wildly and completely wrong.

Okay, everyone makes mistakes, even energy analysts. In 2008, the EIA cleaned up its act and produced this forecast: