Love Is in the Air: Vladimir Putin, the World's Greenest Politician?

An unexpected actor has more positive impact on the world's climate than Mr. Obama and the EU combined: Vladimir Putin.

Cutting Emissions in India

A look at the construction sector

Why Coal is Worse than Nuclear

Many people would prefer coal power generation over nuclear. Is this preference justified?

Energy: Empowering the Consumer?

A talk by MP Laura Sandys

Dieter Helm: The Carbon Crunch

My review of Dr. Dieter Helm's latest book on climate change.

Sunday, November 16, 2014

Love Is in the Air: Vladimir Putin, the World's Greenest Politician?

As this post is being written, many eyes are still pointing in disbelief at the US-China deal on climate change that presidents Barack Obama and Xi Jinping closed on November 12. In the deal, Mr. Xi promised that his country's GHG emissions would "peak around 2030," while Mr. Obama pledged a 26-28 percent cut in US GHG emissions by 2025 from their 2005 levels. Let us not discuss whether the deal will suffice to stop global warming at 2 degrees Celsius from pre-industrial levels, or whether it will even take off before being killed by the recently emboldened Republican congress. Instead, let us focus on what - or who - made this deal possible. And I am not talking about Mr. Obama and his famed diplomatic skills, or Mr. Xi and his vision. Rather, I am talking about the benevolent monarch-turned-green-activist that is Vladimir Putin, who is merely showing to us all how much he loves our planet. And love, as Mr. Putin put it on November 7, is the meaning of life

Vladimir Putin declaring his love for the Earth. Source: Author.

Yes, this is (almost) not a joke. Vladimir Putin, Russia's president, is in fact the man pulling the strings behind the US-China deal. To see why, let us dig deeper into recent events. After his annexation of Crimea this March, Vladimir Putin has found himself in a difficult economic situation due to the sanctions (however feeble) initiated by the United States and their mostly European allies. To increase his cash-flow and decrease his dependence on gas exports to malicious Europe, Mr. Putin signed a deal with China this May to supply it with 38 billion cubic meters of natural gas a year. On November 9 (two days after declaring love to be the meaning of life), he signed another deal for a further 30 billion cubic meters per year. Together, these two deals amount to nearly half of Russia's yearly gas exports to the EU.

This new, enormous supply of gas gives China a unique opportunity to decrease its colossal dependence on coal: China generates around 80% of its electricity using coal and, together with India, adds three new coal-fired power plants every week to its grid to satisfy its rapidly rising energy demand. From an environmental point of view, coal is by far the worst fuel we have. Burning it not only releases copious amounts of dust, sulphur, and other nasty chemicals, but also 25% more greenhouse gases than burning gasoline and twice as many greenhouse gases as burning natural gas. 

And here is where Mr. Putin's gas deal comes in: the 68 billion cubic meters of gas from Russia will displace the burning of coal in China - and a lot of it at that. It will enable China to displace between 150 and 180 million metric tons (Mt) of CO2 equivalent greenhouse gases (CO2e) per year. That is because in order to produce the same amount of electricity that the burning of the Russian gas can produce, China would need to burn coal that would release some 300 Mt CO2e annually. Burning the 68 billion cubic meters of Russian gas instead will release only between 120 and 150 Mt CO2e per year. To put things into perspective, it took the EU four years between 2009 and 2012 to achieve a reduction of this scale in its greenhouse gas emissions as part of its famed ETS.

Vladimir Putin and Xi Jinping after signing their second mega deal on gas. Source: Russia Today.

Now back to the US-China deal. China would not agree to a deal if it did not believe that it can stop its emissions from rising by 2030 without incurring additional costs. It would not believe that it can stop its emissions from rising by 2030 if it did not have access to large amounts of cleaner sources of energy (together with an economy that is expected to peak at around 2030 as well, of course). Russian gas is, at least in part, just the assurance that China needed to agree to a deal with the US.

Let us now summarize. On November 7, Mr. Putin declared love to be the meaning of life. To put his words into action, he showed his love for our planet on November 9 by signing a huge gas deal with China, which allows China to slow down the rise in its greenhouse gas emissions. This in turn helped give China the confidence to agree on a climate deal with the US on November 12. Oh, love is in the air, and all thanks to Mr. Putin, the humble, benevolent monarch-turned-green-activist. A few more Crimean crises and the problem of global warming will be all but over. And Moscow will be the capital of Europe.

Sunday, August 24, 2014

Cutting Emissions in India: A Look at the Construction Sector

From the first week of August until the last week of September, I was given the opportunity to work as an intern for the World Resources Institute (WRI), a Washington DC-based think tank, on a greenhouse gas (GHG) emissions reduction program in Mumbai, India. WRI is an organization whose mission is "to move human society to live in ways that protect Earth’s environment and its capacity to provide for the needs and aspirations of current and future generations". WRI has six main focus points: climate, energy, food, forests, water, and cities and transport. It works through various programs and initiatives in the areas of business, finance and governance.

One such initiative, aimed at the business side of things in the climate and energy areas, is the India GHG Program, a voluntary framework for businesses to measure and manage their greenhouse gas emissions. The reader may ask: why would businesses, keen on maximizing their profits, want to put up with the cost of measuring, not to mention managing or reducing, their GHG emissions? The idea is simple: it is often in the businesses' interest. As notes Greg FitzGerald of Carbon Analytics, an Oxford-based technology venture, cutting emissions often leads to cost reduction, efficiency improvements, risk reduction (particularly in jurisdictions where legal GHG-reduction targets are expected), and brand and reputation improvement as a business that cares about more than just short-term profit.

In India, a developing country whose GDP has grown 7.5% per year on average in the last decade, a large source of GHG emissions is the construction sector. From now until 2025, 11.5 million homes are expected to be built in India every year, excluding office buildings, infrastructure and other construction. These buildings will emit greenhouse gases in three phases: during their construction, use and disposal. While many buildings today are built so as to minimize their in-use emissions by reducing their energy consumption, not so many are built with the idea of minimizing the GHGs emitted during their construction. That is despite the fact that embedded emissions comprise between 32 and 60% of a building's total GHG emissions over a 20 year cycle, mainly from the production of cement, steel, glass, bricks and timber.

Mumbai's all new sea bridge in the front and Mumbai's all new skyline in the back. Zoom into the picture and see the cranes everywhere. The Indian construction boom is certainly real in Mumbai. Source: Author.
However, the construction boom is happening not just in cities. For example, see this set of apartment complexes being built near Asangaon, a village about 70km north-east of Mumbai. I wonder who will live in them: certainly not the villagers, who would not be able to afford it. Maybe we have a new bubble in the making? Source: Author.

As a result, millions and millions of tons of GHGs will be emitted every year as part of India's construction boom. Assuming that there are inefficiencies in the construction process, countless tons of GHG emissions can be prevented. My job is to identify these inefficiencies and work to minimize them with some of India's largest construction companies. 

This work will involve three broad steps. First, we need to find out who are the suppliers of key materials (cement, steel, glass, bricks and timber) to our construction company. Second, by working together with these suppliers, we need to gather precise data on their emissions using the GHG accounting tools developed by WRI and adjusted for Indian circumstances. Finally, we will develop a tool to analyze the data in order to identify inefficiencies and offer suggestions for improvement.

Of course if we are to reverse, stop or significantly slow down global warming while maintaining or improving our standard of living, reducing emissions from construction is only a drop in the sea. Reducing our dependency on coal, stopping deforestation, reversing desertification, implementing smart incentives, improving technology and other initiatives will be required as well. In other words, we will have to focus on the biggest opportunities for GHG emissions reduction--and the Indian construction sector is certainly one of them.

Wednesday, August 6, 2014

Published Article - Activists and Extractive Industries: An Alliance Against Social Development?

Recently an article that I submitted to the United Nations Institute for Research and Development (UNRISD), was selected as a winner in the Young Scholar Think Piece series (YSTP). You can read the article here:

Activists and Extractive Industries: An Alliance Against Social Development?

Wednesday, May 14, 2014

Why Coal is Worse Than Nuclear

The anti-nuclear lobby in some countries can be very strong: so strong, in fact, that merely the fear of it taking action can shape a country's domestic politics. Take Germany as an example: although the political attitude towards nuclear power in Germany had been shifting since the first Red-Green government took power in 1998, nuclear power accounted for 25% of Germany's electricity generation in 2011. With its very low carbon intensity, nuclear power was to help Germany achieve the strict de-carbonization targets it has set for itself.

Today, nuclear energy generates only 18% of Germany's electricity, and is set to be phased out completely by 2022. Why did this happen? The answer is that Germany made a sudden turn after the March 2011 Fukushima Daiichi accident. Suddenly, all of Germany's political parties agreed that nuclear power generation has no place in the country.

To be able to withstand the phasing out of its nuclear power generation, Germany had to find a new source of energy. That source is coal, which now accounts for more than half of Germany's electricity generation, compared to 43% in 2011. The share of coal is set to increase even further as more nuclear power plants are turned off.

For opponents of nuclear in Germany, this is a major victory. The chances that any German citizen dies as a result of a nuclear accident will be wildly diminished. But is the victory really as big as German politicians say? Or, in fact, is it a victory at all?

Unfortunately for Germany, the phasing out of nuclear in favor of coal is not a victory but an outright loss. The pollution from burning coal and other solid fuels is responsible for 4 million worldwide deaths annually according to the World Health Organization (WHO). In addition, compared with any other fossil fuel, and with nuclear, coal is by far the deadliest for its workers. Although there are no accurate figures, BBC estimates that about 12,000 people die every year from coal mining accidents.

Compared to coal, nuclear power is a much safer option. In the history of nuclear power, only about 1,000 people died as a result of nuclear power plant meltdowns, or approximately 2 deaths per year on average. Of those, 99% died in Chernobyl (note: in Fukushima, people died from Tsunami and not from the nuclear meltdown). Compare that to the four million and twelve thousand deaths caused by coal every year, and you see that every year coal kills about 2 million times more people than nuclear. From this perspective, every nuclear power plant that replaces a coal power plant saves livesA recent study by NASA quantified this relationship, calculating that nearly 80,000 deaths are prevented annually by nuclear power.

80,000 deaths every year are prevented by nuclear power. Source: NASA.

So why did German politicians decide to eliminate nuclear power generation, even though the decision in fact kills people? In my opinion, the underlying reason is psychological: people fear what they do not understand. It is like flying on a plane: while it is statistically much less likely to die in a plane crash than in a car accident, most people still fear flying more than driving a car or crossing a road. Nevertheless, when a plane crash occurs, the news is full of it, further instilling the irrational fear of flying in people who are already prone to dreading it.

The same problem is with nuclear. When a nuclear reactor melts down, like it did in Fukushima, Chernobyl and Three Mile Island (the only three nuclear accidents in history), the media cover the event for months at a time. Simultaneously, when a coal mining accident happens, many media overlook it. Take the example of the coal mining accident that occurred in Turkey yesterday night (13 May 2014). Over 200 miners are confirmed dead, and many more are still unaccounted for. Nevertheless, some of the most read newspapers, such as The New York Times, did not even mention the accident.

NYT did not report on Turkey mine blast (14/05/2014, 09:00)
Al-Jazeera did report on Turkey mine blast (14/05/2014, 09:00)

So what is the moral of the story? People are irrational creatures who fear the unknown. The media know it and jump at every opportunity to sell a sensational story. Politicians know it, too, and jump at every opportunity that could raise their approval ratings. Therefore we live in a world where newspapers are read that show a distorted picture of reality, politicians are reelected who do not deserve to be, and more people die than need to.

A savvy reader may ask me: why do you promote nuclear power over renewable energy? Would it not be better for Germany to scrap both nuclear and coal in favor of wind, solar, biomass and other renewable technologies? In an ideal world, it would. However, current renewables have one problem: they are intermittent. Wind does not blow all the time, and the sun only shines so many hours a day. But coal can burn and nuclei can fission at any time of the day. Thus, a second moral of the story: we need a renewable energy source that can follow demand. So, rather than waste your energy on shunning nuclear (or coal), go out there and invent one!

Disclaimer: this article is in no way meant to promote one media source over another. It merely serves to illustrate the choices that media make every day.

Friday, May 2, 2014

Energy: Empowering the Consumer? A talk by MP Laura Sandys

On May 1st the OUCE hosted a talk by MP Laura Sandys (Conservative, South Thanet) with an elaborately long title: "From the other end of the telescope: mixed energy generation, plug & play grid - empowered consumers".

Laura Sandys with me

In her talk, the MP argued that there is not enough innovation in the UK energy sector. The sector is privatized but behaves like a 1970s public enterprise, she said. There are three main problems with the sector according to her: the system design may not be appropriate for the circumstances, there is lots of systemic waste (with 25-35% average heat loss in UK electricity production), and people do not understand their energy bills, making it difficult for them to make smart decisions.

She then focused on the third point for the majority of her talk. Many consumers in the UK, she said, do not understand the basic units of energy measurement. Their bills come to them with kilowatts and they do not know what that means in terms of their consumption. How many dishwasher cycles does this represent? How many pizzas? How many hours on TV? In addition, she said, consumers often do not know that turning on their heating during January / February peak hours can cost them six times more per kilowatt than outside of the peak. This lack of information, she said, makes it difficult for consumers to make smart energy-saving decisions.

In turn, energy companies have a problem ensuring that lights do not go off during peak hours. To do so, they keep large amounts of expensive excess capacity that they only use during the peak. This is in part why peak electricity prices are so so much higher than off-peak prices. At the same time, low-income consumers who spend too much on their electricity bill cannot afford to go out and spend their money in the local economy.

Sandys offered a solution to this problem: add more marketing experts to energy companies who understand consumers and can communicate with them effectively. They could create solutions such as vouchers that allow them to take 50 pounds off of their energy bill if they go to Pizza Hut during peak hours. This would save money to energy companies money who would not need to run excess capacity and to consumers who would not pay for heating during peak hours. It would also boost the local economy. What is there not to like?

The reactions from the audience were mixed. Some asked why this has not yet happened it if is such a great idea? Others noted that similar strategies have unsuccessfully been tried in the past. Sandys replied saying that the problem is in the people who are in charge of marketing at big energy companies. New marketing experts should be hired, she said.

Perhaps Sandys is right and her idea should be tried. But, instead of attempting to change the practices of large energy behemoths, approaching some of the myriad of smaller energy companies, such as LoCO2 Energy, might be a better strategy. If these companies find it profitable to engage in such activities, the large ones will no doubt follow suit.

However, the issue of unschooled consumers that Sandys described seems to have deeper roots. That is, does the UK have an education problem if people do not understand kilowatts? I leave that up for discussion.

Saturday, March 29, 2014

The Carbon Crunch: A book review

Last week Dr. Dieter Helm, a well-respected economist at the University of Oxford, agreed to meet with me regarding my masters thesis. To come prepared to the meeting, I read much of his work, including his most recent book, The Carbon Crunch: How We're Getting Climate Change Wrong - and How to Fix it. The book puts a very interesting spin on what we know about climate change mitigation policies and is well worth reading. 

The Cover of Dr. Helm's book

Dr. Helm's main point is that current policies and technologies are not enough to keep global warming below 2 degrees C, the threshold that most scientists agree would not cause catastrophic climate change. In the first chapters, he sets the scene with the following arguments:
  1. Coal is by far the dirtiest fossil fuel we have. Burning it releases twice as much CO2 as burning natural gas, in addition to other polluting gases from the NOx and SO­x family, as well as small particles. These cause major air pollution and cause the early deaths of millions of people every year. Coal mining is also a dangerous business: by far more people die every year from coal mining than from all nuclear power plant accidents to date combined.
  2. Because of its relative safety (compared to coal) and very low CO2 emissions (compared to all fossil fuels), nuclear power generation is a good option. However, nuclear is too unpopular and public and political sentiment about it changes very quickly. This was shown by the sudden German exit from nuclear after Fukushima, despite previous heavy investment into nuclear.
  3. Current renewables are too intermittent to be a reliable source of energy. When the wind is not blowing and the sun is not shining (which can be quite often in Europe, especially in the winter), coal- or gas-fired power plants need to make up for the gap. The more renewables in the system, the larger this gap becomes, and the larger the need for coal and gas. 
  4. Carbon consumption is the largest problem. Even if the power and manufacturing sectors in Europe decarbonizes completely (which is impossible due to the intermittency of renewable energy), Europeans will still import carbon-heavy goods from other countries, mainly China. China uses coal for 80% of its power generation and, together with India, adds 3 new coal power plants every week.
  5. Improving energy efficiency will not help us either, for three reasons. First Jevon’s Law dictates that as energy efficiency improves, so does energy consumption. Second, more energy will be consumed worldwide as living standards in developing countries rise. Millions of people in countries like China are already buying cars, fridges, and other energy-intensive goods.  Finally, at least 3 more billion people will be added to the world population by 2050, and they will also want to consume energy.
  6. New fossil fuel discoveries, such as the shale gas revolution, show that we will not run out of fossil fuels anytime soon. There is no peak coal, oil or gas in sight. We have plenty of fossil fuels left to warm the planet catastrophically.
  7. The Kyoto Protocol is not effective enough and there is going to be no international agreement on climate change that works for at least for another decade.
  8. The current EU ETS is ineffective because the price of carbon is too low. The free emissions permit allocation system leaves space for widespread lobbying.
Having set the scene, Dr. Helm recommends the following actions for climate change mitigation.
  1. Given that burning coal releases twice as much CO2 per unit of energy than burning gas, replacing coal with gas would be the best transition strategy.  In fact, it would cut our CO2 emissions more than using renewables. This is demonstrated by the fact that in the US, which replaced some of its coal capacity with cheaper shale gas, CO2 emissions fell down rapidly in the past five years.
  2. We must stop investing in intermittent renewables. They are not financially feasible and their intermittency means we are still heavily dependent on fossil fuels. Instead, we should invest into R&D for new renewable technologies.
  3. Decarbonizing our energy production is not enough—it may even make things worse as industries move to coal-intensive countries like China. We must address our consumption as well to truly cut our carbon emissions.
  4. To cut our consumption, a carbon tax must be implemented, taxing every good by its carbon content. To keep our exporters competitive, we will not tax our exports. We will also not tax imports that were taxed for carbon at home. A carbon tax will give us a fixed price of carbon that we can control and will remove the current space for lobbying.
  5. The carbon tax has another positive: it will put pressure on our trading partners to implement their own carbon tax. After all, why should they leave the tax revenue to us if they can keep it themselves? Thus the carbon tax will also lead to the creation of a bottom-up carbon pricing regime.
  6. The carbon tax will hurt. Consumers will substitute some of their consumption for less carbon-intensive goods, but their real income will fall nevertheless. Politicians are aware of this and must tell this to their electorates.
From my perspective, Dr. Helm's arguments make perfect sense. They are supported by convincing examples. The book's recommendations are in line with what I have argued in the past. The only problem I see is that there might be a strong international political backlash against a carbon tax. EU trading partners could see it as protectionism and sue the EU in the World Trade Organization (WTO). Although Article XX of the WTO does provide exceptions for environmental protection, a result in favor of the EU is far from certain given the past rulings of the WTO Appellate Body. Dr. Helm replied to my concern by saying that invoking the WTO is EU's excuse not to change its current, ineffective Emissions Trading Scheme (ETS), into which it has invested too much political capital.

That may be true. But no matter who is right, one thing is certain. If we do not try a border tax, we will never know if it works. The current EU ETS is not working and needs an update. Dr. Helm's recommendations might be a very good start.

Tuesday, July 30, 2013

We Are the Children of the (Shale) Revolution - Why We Should Embrace the Shale

Although still unknown to many, the technologies of hydraulic fracturing (also known as fracking) and directional drilling are perhaps the two most important inventions of the recent years. In combination, they are bound to have an unprecedented impact on the world’s distribution of wealth and power in this century. By using a horizontal (directional) drill and injecting extremely hot, pressurized mix of water, chemicals and sand into the shale underneath, these technologies allow us to extract oil and natural gas from the rock itself. These “unconventional” methods of extraction have resulted in what is called the shale revolution, completely redrawing the world’s natural resource maps. Although there are clear positives to this so-called shale revolution, the extraction of shale oil and gas must be carefully managed if we are to reap all of its benefits.

This is how horizontal drilling and hydraulic fracturing work in practice.
Most of the positives of these developments are reasonably self-evident: we will see a large increase in the world output of oil and gas, pushing down prices, uplifting employment, and generally moving the world economy in a positive direction. In the United States, the world’s foremost pioneer of fracking, these effects are already beginning to show. According to the US National Petroleum Council’s 2011 report, unconventional sources could result in more than doubling the oil and gas production in North America. Such an increase would make the United States a net oil exporter, leaving it to produce more petroleum than Saudi Arabia or Russia. Now the US is already fully self-sufficient in natural gas production, despite the fact that five years ago it started building a gas-importing infrastructure. Employment has also been positively affected. According to the latest report of the US Bureau of Labor Statistics, the unemployment rate in North Dakota, a state that sits atop the oil-rich Bakken Shale formation, is only 3.3%—the lowest in the country. As there are at least two more similar shale formations in the USA, it is likely that at least two other places in the USA will experience a similar revival. The price of gas in the US also dropped markedly in 2009, to about a third of its 2008 price. This will drive energy prices in the US down, further reviving the US economy. If the US chooses to export this gas abroad, world prices will also fall, bringing a more modest revival to other world economies.

The natural gas price dropped in the US with the new shale gas extraction technologies.
In addition to causing an economic uplift, a transformation of the USA from a net importer to a net exporter of oil and gas will have an unprecedented impact on world geopolitics. First, it will doubtlessly increase the importance and (energy) independence of the USA, perhaps reversing its decline as the world’s hegemon. Other countries that discover the existence of similar deposits on their territory will experience a comparable rise in their wealth and geopolitical importance. Second, if indeed the current predictions are correct, the shale revolution will increase the known supply of fossil fuels so much that the world will not need to worry about running out of oil for most of this century, even if demand for it rises. The time thus gained, along with the financial profits from the shale revolution, could be used productively to search for new, cleaner, cheaper, and safer sources of energy after we reach peak oil (the point where we start producing less oil and gas than we need). If such research takes place and succeeds, the shale revolution could be seen as the turning point in the energy security of humankind.

While the positive impact of the shale revolution is unprecedented, we should not overlook the possible negative effects of these technologies. An environmentally-minded reader might rightfully object that an increase in the world’s supply of fossil fuels will result in more CO2 emissions and other environmental externalities, such as groundwater contamination and minor earthquakes, both of which have been associated with fracking. In addition, if the right policies are not implemented, the aforementioned research might not take place, thus in fact delaying the point when we start seriously researching cleaner and sustainable sources of energy. In this scenario, our reliance on fossil fuels would increase without having an exit strategy. This is a danger we cannot afford.

Because of such fears, some countries are opposed to joining the shale revolution and prohibit fracking in their territory. In the EU, these include France, Luxembourg  The Netherlands, Bulgaria, and the Czech Republic (where shale reserves are minimal). Despite their current opposition to fracking, these countries will start fracking sooner or later, when the economic benefits outweigh environmental concerns. As all of these countries could use the economic uplift associated with shale gas, and as it is in their interest to decrease their energy reliance on Russia, it will most likely not take too long for them to start issuing fracking permits. Their environmental fears may result in tighter regulations, which may slow down the progress of drilling but at the same time increase their citizens’ safety. Thus Europe will likely experience a revival of its own, though it may take longer than in the United States. The rest of the world will no doubt soon follow suit.

In conclusion, the shale revolution, if properly managed, will have a highly positive net impact on the world in the coming decades. Fossil fuel prices will fall and employment will rise, uplifting many economies from the lingering economic crisis. The increase in fossil fuel usage must, however, be accompanied by appropriate policies. It is essential that some of the proceeds from fracking be used to promote research of clean, sustainable technologies. Simultaneously, the negative environmental externalities of fracking must be mitigated by policies that increase its safety. Governments should encourage inventions that make fracking cleaner and enforce strict, loop-free regulations that reward compliance and punish disobedience. As the world’s conventional fossil fuel reserves dwindle, more and more countries will move toward “unconventional” shale sources. As a result, the shale revolution cannot and should not be stopped. It must only be properly managed.