The Unexpected Perspective
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Are All of These Students Right About Climate Change?

Students around the world are exhorting their elders to do something about climate change. Have they got it right? Should we be listening more? Or have they identified the right problem, but the wrong solution?

            Pretty much as long as there have been schools, students have looked for reasons to cut class.  Inspired by a Swedish teenager named Greta Thunberg, students around the world have found a new reason: protesting against perceived inaction on climate change.  Their fear is that if we don't get more serious about climate change, the real victims won't be today's older generations, it will be today's young people, and the generations to come after them.

            They've got a point.  Some of the effects of greenhouse gas-induced climate change are already apparent, but the really serious changes probably won't arrive for 30+ years from now. Baby boomers and the generation before them will largely have passed on, but today's millennials – the ones out protesting – will be middle aged, and a whole new generation will have arrived in time for a potential eco-catastrophe.

            These young protesters are trying to shake the rest of us into action.  Great idea!  Unfortunately, I'm afraid they're proposing the wrong solution.  It's the same wrong solution embodied in the Green New Deal.  We definitely need to address the problem of climate change, but if we think that concerted governmental action through taxes and regulation will solve the problem, we are totally fooling ourselves.  Instead, as I demonstrate below, the only way we're going to solve the potentially catastrophic problem of greenhouse gases is through improved technology.  If government is to play any truly effective role, it should be to foster the development and distribution of better technology.  That's where we should be directing our attention.

            The attached world map graphic from the United Nations provides some useful clues.  The chart shows per capita energy consumption around the world.  Energy consumption is a pretty good proxy for greenhouse gases.  Worldwide, only about 25% of electricity is generated by renewables – still mainly hydropower - and the rest through burning fossil fuels.  Of course, transportation is almost entirely based upon CO2 emitting vehicles. 

            As the chart shows, the required energy to have a good standard of living is indexed at 100, and the worldwide average is 79.  What immediately jumps out is that we in the USA are true "energy hogs", coming in at a per capita of 290!  Thus, it's really important for the USA to make a wholesale switch to renewable energy.

            Here's the problem.  We could make a draconian switch to renewables in the USA, as many are advocating, but it wouldn't come close to solving the problem.  Not only that, even if much of the rest of the world similarly made a draconian switch, it still won't solve the problem.  

            To show why this is true, let's divide the world into two groups.  In the first group we'll include the USA, Canada, the European Union, China, Japan, Australia and New Zealand.  With the exception of China, all of these are Western style democracies that are economically advanced.  The conventional wisdom is that the core of the climate change problem is in these countries.  The argument is that we need drastic action, largely through governmental intervention, to get the necessary reductions in these countries.

            If we could project the same map into the future, say in 30 years or so, that strategy might make sense.  However, the situation is very likely to be dramatically different in 30 years.  The reason is because the rest of the world, where the majority population is, and where likely all of the population growth will occur during the rest of the 21st century, is rapidly growing.  Even if we have a massive reduction in greenhouse gas emissions in the USA, Canada, the European Union, China, Japan, Australia and New Zealand, all the progress we make in those countries will be offset by emissions growth in the rest of the world.

            Let's take a look at the math.  At present, the world has about 7.6 billion people.  The combined population in the USA, Canada, the European Union, China, Japan, Australia and New Zealand is about 2.5 billion, meaning that the current population of the rest of the world is 5.1 billion.  Let's assume for a moment that through concerted action, these countries could reduce their greenhouse gas emissions by 75%.  That, of course, would be a fantastic result!  Unfortunately, we wouldn't be able to cheer the result until we consider what happens in the rest of the world.

            If the rest of the world increases its per capita energy use by 48 units on the UN index, it would completely offset the 75% reduction made by the USA, China, the EU, Japan, Canada, Australia and New Zealand.  It gets worse!  Many experts project a worldwide population of 9 billion by mid-century, a net increase of 1.4 billion.  Most likely, nearly all of that growth would be in the less developed parts of the world.  It's unlikely to happen in places like the EU, China, and Japan, where populations are actually starting to shrink. 

            If net population increases by that projected 1.4 billion, then even if we get the 75% reduction in the USA, EU, China and the other countries, the entire reduction will be offset if the rest of the world increases by 38 on the index.

            Is such an increase realistic?  Absolutely.  If India itself has zero population increase but moves to the projected average good standard of living – 100 on the scale – it alone would offset 38% of the reduction from the advanced economies.

            What this points to is a need for a three part strategy.  Part one is to make a major reduction in greenhouse gases in countries like the USA, China, and the EU.  Part two is to help the developing grow without greenhouse gas emitting energy.  Part three is to develop a way to recycle at least some of the excess CO2 we've already put into the atmosphere.  There are dire predictions that even if we emit no more excess CO2, what's already in the atmosphere will create serious problems.

            So let's go back to the student protesters, the Green New Deal, and those advocating a strategy of taxation and massive governmental intervention to solve the climate change problem.  This approach could work if, and only if, the world stands still economically and population-wise.  Of course, it's not going to do that.  Because it won't do that, solving "part one" of the problem – drastic reductions of CO2 in the USA, Canada, the EU, China, Japan, Australia and New Zealand – just won't solve the worldwide problem.  We need something that also prevents the growth of CO2 emitting energy in the developing world (part two), and we also still need a way to recycle excess CO2 that we've already put there (part three).

            The only way we can realistically do all three of these things is through better technology.  We've already seen over the past 20 years or so the benefits of new technology to avoid greenhouse gas emissions.  These include solar technology, wind power technology, hybrid and all-electric vehicles, and battery storage.  The crazy thing is that over the past 20 years, the USA has actually led the world in CO2 reduction.  It didn't do this through taxation and governmental regulation.  It accomplished it because of the development and dissemination of better technology.

            If we focus our efforts on improving technology, we can address all three parts above.  Better technology will result in greater adoption of renewables in places like the USA, China, and the EU.  It will also be key in the developing world, especially if we pursue what I call an "avoidance strategy".  This approach has worked before.  The mobile phone industry is a perfect example.  Large parts of the developing world completely missed landline telephones, going instead directly to mobile phones.  Low carbon energy is analogous.  If we can somehow get the developing world to focus on investing in renewables technology, it will avoid the energy equivalent of landlines.

            How can we get the developing world to avoid investing in CO2 emitting technologies?  The strategy of government intervention completely breaks down here.  It's one thing for the Green New Deal to mandate renewables in the USA, but there's absolutely no way to mandate the same in Latin America, Africa or Asia.  Yet, as shown above, those are precisely the places where the growth of the next 30+ years will occur.  It is already happening.  In fact, we in the developed world have a largely outdated view about the rest of the world.  If you have any doubt about this, I commend to you Hans Rosling's Factfulness.

            Then, of course, there is the problem of all the CO2 we've already dumped into the atmosphere.  We've got to find a way to get rid of at least some of that.  Again, no amount of taxation and regulation will fix this because at present, other than planting an incredible number of trees, we don't know how to get rid of the excess CO2 we've already emitted.   We need to create new technology.

            If technology is the core to solving the greenhouse gas problem worldwide, how can we fulfill the demands of the student protesters to take serious action?  Chances are, over time the necessary technology will be developed.  The problem is that if we leave it to the marketplace, it probably won't happen quickly enough.  Absent increased effort, the necessary technology won't be developed quickly enough to prevent huge problems in 30 years.

            Of course, a huge obstacle is the lack of consensus about the issue.  Unfortunately, the current approach being taken to convince skeptics is, frankly, crazy.  Why do we think calling people stupid ignorant fools that we'll persuade them to change their minds?  Of course it's going to fail!  Not only that, even many people who believe the climate science are very leery of taxation and governmental regulation as the way to solve the problem.

            So how could this chasm be bridged?  As I've written before, I believe the issue needs to be re-framed.  I think the best way to do that is to emphasize the economic benefits of removing excess carbon and other greenhouse gases from the atmosphere. Rather than preach environmental doom and gloom, focus the message on the economic benefits to all of removing excess carbon from the atmosphere - the next giant worldwide economic opportunity.  If it can be shown to be a huge economic opportunity for investors, climate "politics" should recede into the background.  When we start realizing that removing excess carbon from the atmosphere is potentially a trillion dollar opportunity many times over, the problem definitely gets reframed!

            For those who believe that government is critical, the good news is there is plenty to do, it just isn't quite what's been previously proposed.   Government can help in three specific ways.  First, government can encourage basic research, typically that which is done by major universities and research institutes.  It should focus on making solar technology more efficient, battery storage better, and finding ways to recycle carbon out of the atmosphere.  The benefit of this should be the development of products and services that will make renewable energy cheaper and more efficient than greenhouse gas emitting technology.  If we want to prevent the developing world from adopting more greenhouse gas emitting technology, focus on making the alternative cheaper and better.  The more economically attractive we can make solar, wind, electric vehicles and battery storage, the more the problem will solve itself.  Not only that, people who might otherwise dislike climate science will probably want to sign on IF they can be shown that removing carbon from the atmosphere is a profitable initiative.  Why do you think we switched from horses and horse carts to hydrocarbon powered vehicles a century ago?

            Second, governments can help by making it easier and less expensive to finance new projects, particularly in the developing world.  Renewables technology is already pretty cost competitive.  Government, however, could help nudge things along.  One simple way would be to provide incentives to Western financial institutions to make these types of loans.  Providing various government backstops to private financing could be very helpful.

            Third, governments at all levels can help encourage entrepreneurship.  Getting basic technology translated into new products and services depends upon people like Tesla's Elon Musk.  To the extent that governments at various levels can help such entrepreneurs, everyone should benefit.

         Those of us in the older generations tend to ignore or dismiss younger people protesting in the streets.  We really shouldn't do that to the Greta Thunberg's of the world.  They're making a good point: we need do something about climate change.  However, no amount of taxation and governmental mandates will solve the problem. What we need to do is find ways to improve technology.  It is really only through the application of better technology that we will avoid the environmental Armageddon that so many fear.

 

 

 

 

 

 

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Carl Treleaven is an entrepreneur, author, strong supporter of various non-profits, and committed Christian. He is CEO of Westlake Ventures, Inc., a company with diversified investments in printing and software.

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