The free lunch revisited

A blue-ribbon committee estimates the net economic gains from the energy transition at $26 trn – same as I did

Three years ago I wrote a post in my grandest style, with tony literary references and a Veronese set piece, on the negative costs of the energy transition. Remember it? I thought not. To refresh your memory, my back-of-an envelope calculation ran:

  • Net cash cost of energy transition to 2040, based on IPCC: $0
  • Health saving to 2040 from energy transition, using a straight-line reduction from $3.5 trn a year in 2015 to zero in 2060: ≈ $25 trillion
  • Net undiscounted cost to 2040 of the energy transition (cash for energy plus health only, ignoring mitigation cobenefits): minus $25 trillion.

Now a committee of the great and the good called the Global Commission on the Economy and Climate has issued another report (website, pdf). What do you know, they have an estimate of the net costs of the transition to 2030 (pdf pages 12, 22):

Transitioning to this low-carbon, sustainable growth path could deliver a direct economic gain of US$26 trillion through to 2030 compared to business-as-usual, according to analysis for this Report.

These people are obviously more credible than me, and far more influential. The Commission is top-heavy with ex-politicians like a former president of Mexico, CEOs of big companies like Unilever, and the like. The only real expert is Lord Stern. But the actual work was done by kmowledgeable people at Brookings, the WRI, Grantham Institute, and Cambridge Econometrica (not to be confused with the FSB’s tame skunk works Cambridge Analytica). So it looks pretty solid.

How did they get their $26 trillion? Er. What you get is a Tufte-fail pie chart that makes no sense at all (see at the end), and an endnote:

70 The E3ME model of Cambridge Econometrics is a macroeconometric model with inter-linked modules on energy, economy and environment. See: https://www.camecon.com/how/e3me-model/.

So it’s a pure black box. At least my scribbled envelope was clear and sourced.

Their modellers are using a much lower estimate of pollution deaths than me (700,000 a year prevented by 2030 to my roughly twice that, taken from the OECD).

Anyway, the actual headline number is merely the central point in a very wide range of plausible scenarios and should not be taken too seriously. The strong finding is the sign (negative) and the order of magnitude (tens of trillions). You can take these to the bank.

The report has 207 pages and is full of worthy detailed stuff I did not try to address in my post. Take it as the conventional wisdom of the environmentally woke tendency of Davos Man. This is not exciting but it’s still good news.

Will it have any effect? This is a generic question about rational policy analysis in the age of Trump and Brexit. One side now knows what to do to save humanity, and the particular countries and communities it inhabits, from climate disaster. The problem is to break the opposition to doing it from entrenched fossil fuel interests and their hirelings. What we are trying to do is destroy first the coal industry, then the oil industry, finally the gas industry. They don’t like this and are fighting back. A good policy is any policy that hurts fossil fuels and can secure a decisive majority: Conan’s rules.

Footnote 1 A bad pie chart

From page 22. This is a pie with no units, no scale, and  incommensurable components. It should have been thrown to the kitchen dogs. Is there a non-empty set of wonkish and environmentally sympathetic decision-makers and opinion-formers who can’t read a chart or table?

Footnote 2 A call for a thought experiment

In the USA, there seems to be a segment of conservative opinion that is in in full denial over climate change but is receptive to science over air pollution. This distinction is playing out in US courts today over the Trump attempt to roll back Obama’s CPP – for which McCarthy’s EPA wisely documented the extensive health gains. In my earlier post, I sketched an argument for the energy transition that ignored climate costs almost entirely, and focussed on the health ones. I suggest this be taken up by professionals. Does my conclusion hold up, that the transition is the right play even if we ignore the climate impacts entirely?

Doing this properly, you would need to recognise that GHG emissions and air pollution are largely complementary bads but not entirely. Cut coal and oil use, and you reduce both. But natural gas burns clean and has negligible health impacts, while adding gigatonnes of CO2. Contrariwise, the burning of wood, charcoal and dung in Third World cooking fires may be completely sustainable and zero-carbon (depending on the woodland and livestock management), but it has a very large health cost from indoor air pollution. If Cambridge Econometrica ran their model round an ambitious air-pollution-only policy that left natural gas alone while eliminating coal and oil, and addressed cookstoves, I suspect the net gain would still be in double trillion figures.

Author: James Wimberley

James Wimberley (b. 1946, an Englishman raised in the Channel Islands. three adult children) is a former career international bureaucrat with the Council of Europe in Strasbourg. His main achievements there were the Lisbon Convention on recognition of qualifications and the Kosovo law on school education. He retired in 2006 to a little white house in Andalucia, His first wife Patricia Morris died in 2009 after a long illness. He remarried in 2011. to the former Brazilian TV actress Lu Mendonça. The cat overlords are now three. I suppose I've been invited to join real scholars on the list because my skills, acquired in a decade of technical assistance work in eastern Europe, include being able to ask faux-naïf questions like the exotic Persians and Chinese of eighteenth-century philosophical fiction. So I'm quite comfortable in the role of country-cousin blogger with a European perspective. The other specialised skill I learnt was making toasts with a moral in the course of drunken Caucasian banquets. I'm open to expenses-paid offers to retell Noah the great Armenian and Columbus, the orange, and university reform in Georgia. James Wimberley's occasional publications on the web

22 thoughts on “The free lunch revisited”

    1. It's not rocket science. It does, however seem to call for brain surgery, as the myth of exorbitant cost is very deep-rooted and impervious to non-invasive therapies.
      https://youtu.be/THNPmhBl-8I

      PS: The sequestration of enormous quantities of excess CO2 will be expensive, and it will be required after we reach net zero, thanks to the two decades lost to denialist agitprop.

  1. I see at least two items on that pie chart that will be considered as costs rather than gains by certain principled conservatives. It's hard to save the world when some religious adherents proclaim that the end of the world is a good thing.

    1. I am perfectly in order, Sir. To quote an informed Economist piece (https://www.economist.com/the-economist-explains/2016/04/06/why-both-i-and-me-can-be-right):
      "Taller than me is not some recent grammatical laziness; it has deep and sturdy roots in the finest English. Prepositional than appears in the 1560 "Geneva Bible" translation ("a fool's wrath is heavier than them both"), Shakespeare ("a man no mightier than thyself or me"), Swift ("she suffers hourly more than me"), Samuel Johnson ("No man had ever more discernment than him") and so on."

      1. Your appeal to authority falls flat. Just because Shakespeare, Swift and S. Johnson are literary stars does not mean that they understood basic English grammar. Swift was at least aware of some of the problems, perhaps because aware of his own linguistic shortcomings and unable to otherwise help himself. Samuel Johnson must have been some sort of chaos muppet, invoking English liberty against such attempts to regulate the language. (This last puts me in mind of his line about the loudest yelps for liberty coming from the mouths of slave drivers, for what was he, with his dictionary, other than a wordly slavedriver?) And have you ever noticed at their spelling?! Atrocious! Shakespeare was so careless about such things that he often used multiple spellings of a word within a single text (from here). So I would not appeal to them as examples of proper English!

        1. I am completely not qualified to get into a thing about grammar, with you or anyone.

          But if it’s so wrong, how come what James said sounds *so much better* than what you say is correct?

          Plus, in English … is there really any authority? We’re not like the French, are we? (*Not* taking a shot at France here. Vive la France! ). It is my impression that in France, there’s an actual government body that is in charge. Do we have one?

        2. That is a head scratcher. Who's right, some of the greatest writers in the English language or the arbitrary rulebooks cooked up by ignorant fusspots like Strunk and White?

          Americans seem peculiarly susceptible to the snake oil touted by grammar peeves from their soapboxes in schoolrooms, newspapers, and social media; no doubt expressing the anxiety of a nation of immigrants determined to show their mastery of a new language to be accepted. (I use the subjunctive and future simple in French, but few native speakers bother.) It's less toxic than the Australian Cringe that inflicted Rupert Murdoch on a suffering world, but still annoying.

          James Wimberley, M.A. (Oxon). I confess I am tempted by the snobbish view probably held by my marginally genteel ancestors since 1485: English is our language, made by us, and we can do what we like with her.

          1. It is clear that an apology is in order. Please accept mine. My cheek is going to need some stitches from my tongue's being so far into it. I had thought that my tone in both prior comments was so obviously absurd as not to need any explanation (and JW's first response seems to support this belief). This being the internet, I was of course wrong. John McWhorter's approach expressed in his views about "the singular 'they/their'" (e.g. here and also here: for a slight disagreement, see here) is refreshingly relaxed and informed.

          2. No apology called for – it was I who overrreacted. (Or should it be me who over-reacted?). Grammar is a curiously explosive subject. They almost came to blows in France over a plan to abolish the circonflex accent. Being a traditionalist, I stick to the classique spellchecker. The diacritic does cue for a difference in pronunciation, inherited from the vanished letter s.

          3. Wait, maybe it’s *my* fault. The sarcasm totally went over my head too. Ha, not for the first time here, either.

            Also, you two are a hoot.

          4. Holy moley!! I just read your link. Holy bleeping bleep bleep!!!

            Mind you … at one point I did ask myself, “who’s Henry?” But don’t worry I have a good recommendation for a book on English history, by someone named Markham iirc. I mostly stopped using Fb in March, but when I finally get the gumption to actually delete it, if I remember I will try to send you a message including this friend of mine you might like, who is also way into military history. It will go in your “other” mailbox, as you and I are friends-of-friends on there (if they still have that other mailbox). I am sorry to say, it’s the foil hat for me, and it’s much too small to really block anything anyhow.

            Also, super cool coat of arms! While watching the royal wedding, I wondered about all those banners. There sure must have been a lot of fighting back in the day. I don’t know how I could have missed your post originally. I do have a pretty spotty memory though. Anyhow, your post is amazing.

          5. IIRC a great number of these impressive coats of arms were fabricated under the Tudors to meet the demands from nouveaux riches who'd done well from the suppression of the monasteries. One of the court heralds providing this remunerative service was a Dutchman, who started by fabricating his own device. The Wimberley coat of arms fits this story perfectly. When William Wimberley was a fighting man, he fought under the banner of the Stanleys, not his own. The independent coat of arms (we made it!) came only after the fighting was over.

          6. Well, it’s lovely to look at, however it came about. It’s hard to know what to feel about history. So much suffering. I guess we can put our grief into prevention.

    1. I washed a rental car once. It seemed like a better idea than paying them to clean out where I'd puked all over the insides of it.

      1. Well, maybe you were just raised properly. Or you didn’t get the car coverage? Just took a little bath on that recently myself. I paid to just walk away. Come to think of it though, I did not ask about the interior!!! Whoa, you just blew my mind.

        1. My mother would have been pleased to hear you say that! (My father would not have been deceived, but he'd've still smiled at you for saying it.) Yeah, I did have coverage. But:

          a) I wasn't sure it would cover this and
          b) the thought of taking it back like that was unbearable, as was
          c) the thought of driving it around a couple more days with that odorama all around me.

          So maybe I was raised right, by people who knew not to ask for trouble. None of it took, of course.

          Turned out after I'd vacuumed it twice and waited for it to dry out, the cruise control even still worked. And the staff gave me something nice when I brought it in–I didn't keep it any longer than I had to–so I think they appreciated my efforts. I'm pretty sure it wasn't that I'd drunk a bit the night before (and had an fascinating terrifying conversation in a racist biker bar out on Jimmy Swaggart Stroll near the New Orleans Airport) but a bad burger I'd eaten just after touching down that Halloween. It's a long story.

  2. The dwarfs' banquet certainly sounds like a good description of recent Australian Liberal/National energy politics. The irony of the ill-fated National Energy Guarantee was that its targets on both emissions and reliability were already set to be surpassed by market forces alone; it would take active pro-coal and anti-renewable government intervention to do as badly as the plan suggested. Of course, that's exactly what many Coalition MPs want, with the result that the country now has a Prime Minister who once brought a lump of coal to parliament to show off to his colleagues, and who compared the Tesla big battery in South Australia to the Big Banana. Thankfully most of the state governments are not being 'paid not to understand' as much as the federal government.

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