1 A former student recently sent me this card:She noted the strong resonance with this class Which leads me to now pose a final question:

2 Where Do We Go from Here? I've described my own early error of fixating upon a single energy technology Which, driven by my research interests, turned out to be solar photovoltaics But David McKay then taught me the need to consider entire energy systems And that energy systems were now hugely complex and rapidly changing puzzles David and I have now taught YOU a lot about those energy system pieces Hopefully, that now suggests many ways in which they might be fit together

3 But how do we ensure that anything is now actually DONE?In his book's final brief chapter, David's closing admonitions were: 1) "Stop saying NO and start saying YES" (to specific energy alternatives) 2) Craft your chosen alternatives into "A plan that adds up" 3) And then "Tell all your political representatives" I echo David's sentiment, but am increasing troubled with his 3rd recommendation

4 Sadly, today's politicians are almost always someone who:1) DID manage to eek out some sort of law degree from somewhere 2) Has NOW mastered the ability to parrot a set of talking points 3) But is totally preoccupied with funding his/her FUTURE re-election campaign ≠ People qualified or inclined to study our carefully crafted energy plans Instead, in their hands our complex plans can easily disappear behind closed doors Through which only well-moneyed lobbyists have access And emerge as endlessly complex, carefully loophole-infested bills That only a pack of lawyers can really understand (or exploit)

5 And I already see rich evidence of highly politicized energy policy:In MacKay's Britain, where politicians have not only gutted support for sustainables but even deleted public service webpages about improving household efficiency Or in power companies successfully lobbying against U.S. sustainability programs such as the Clean Power Plan, Net Metering and/or Feed-in Tariffs And here in Virginia where Dominion Power (the state's largest single political donor!) "convinced" the legislature to adopt a renewables plan that makes it exceedingly unattractive for homeowners to sell power to the grid So sorry David, before I toss the responsibility "over the fence" to the politicians I want a plan that is REALLY simple to understand, implement and monitor

6 Carbon Cap and Trade A Carbon TaxI'm not alone in seeking a simple, clean, efficient, transparent solution The left & the right, businessmen & environmentalists, have all felt a similar need And this has led to a LOT of recent talk about two closely related ideas: Carbon Cap and Trade A Carbon Tax Evidence for such a meeting of the minds? Merril Lynch investment brokers: "Those who advocate only command-and-control regulation seem to ignore all of the published data, from the experiences of academics, governments and the private sector, that highlight precisely why emissions trading is a more cost-effective approach to reducing emissions than blunt regulation. Put simply, it is better to reduce emissions in a way that results in lowest costs to society." 1 The Environmental Defense Fund: "Cap and trade is the most environmentally and economically sensible approach to controlling greenhouse gas emissions, the primary driver of global warming." 2 1) 2) https://www.edf.org/climate/how-cap-and-trade-works

7 Cap and Trade has a longer history, so let's examine it firstIt is a governmental approach to decreasing the emission of a certain pollutant But here the government does not legislate how this will be done It just demands that it will be done: By setting the allowable amount of pollutant emission = The Cap The process starts by surveying ALL present day sources of emission Then, a company's present day emission of that pollutant => It's year #1 Cap And it is issued a permit for that amount of pollutant emission But in year #2, quantities in ALL Caps/Permits are ratcheted downward by x% Following a publically announced, multi-year, decreasing schedule This, alone, would apply equal pressure on all of the pollutant producers An Introduction to Sustainable Energy Systems: WeCanFigureThisOut.org/ENERGY/Energy_home.htm

8 But different companies likely face very different challenges:Company A, may have only one possible production process From which the pollutant is an inevitable byproduct The decreasing Cap would thus drive Company A right out of business For Company B, there might be another possible production process And investment in that alternative might result in less pollutant emission So Company B could survive the decreasing Cap Thus caps alone would drive a rapid corporate survival of the fittest Which could then easily produce massive economic and societal disruption

9 That is where The Trade comes in:Companies are allowed to sell their pollutant emission permits to one another So Company A can offer to buy permits from Company B Those permits (as all permits) still decrease according to The Schedule And buying these permits is going to add to Company A's expenses Which will increase the cost of its product But if Company A's product is essential, we'll accept that now-increasing price But we'll sure as heck try to find ways of using less of that product! Meanwhile, the income Company B got by selling its permits to Company A could help finance its development of that new less polluting process, allowing it to convert itself into a new green Company B! An Introduction to Sustainable Energy Systems: WeCanFigureThisOut.org/ENERGY/Energy_home.htm

10 1) https://en.wikipedia.org/wiki/Invisible_handThe winners? The Environment: Pollutant emission has decreased according to The Schedule Company B: Which has recast itself into an new greener form Company A: Which survived because it has an essential product But which is still being squeezed by its permits' decreasing emission limits And by consumers trying to avoid use of its ever more expensive product All of which has supposedly been accomplished by: Replacing massive governmental micromanagement / regulation with The Invisible Hand of a (quasi) free market economic system = Adam Smith's "unintended social benefits resulting from individual actions" 1 1) https://en.wikipedia.org/wiki/Invisible_hand

11 Does Cap and Trade really work?It was first tested by economists in computer models at the precursor of the EPA: 1 "These studies used mathematical models of several cities and their emission sources in order to compare the cost and effectiveness of various control strategies. Each abatement strategy was compared with the "least cost solution" produced by a computer optimization program to identify the least costly combination of source reductions in order to achieve a given abatement goal. In each case it was found that the least cost solution was dramatically less costly than the same amount of pollution reduction produced by any conventional abatement strategy" 1 The Bush I administration then worked with the Environmental Defense Fund Writing a version of C&T into the 1990 Clean Air Act, targeting SO2 emissions SO2 + H2O => Sulfuric acid => Acid rain => Dead northeastern lakes The result? A rapid and dramatic reduction in U.S. SO2 emissions Leading U.S. & international agencies to label SO2 C&T a resounding success! 1) https://en.wikipedia.org/wiki/Emissions_trading

12 Why not just apply Cap and Trade to ALL greenhouse gases?Well, as cited above, that IS exactly what many suggest Including many economists, investment houses, and the EDF However, as applied to all greenhouse gases, Cap and Trade gets very complicated: 1) There are a LOT of different greenhouse gases 2) Cap and Trade depends on precise initial answers to the questions of: What is each gas's current emission? By whom, in exactly what amounts? But consider my Broader Impacts & Requirements of Power Plants II lecture where: Recent studies suggested that EPA's bottom-up assessment of CH4 emission: - Massively understates that greenhouse gas's total emission - And completely misses "accidental" / "off the books" emissions from rogue operators within the natural gas industry

13 1) http://www.cmu.edu/gdi/docs/cap-and-trade.pdfSo while Cap & Trade minimizes later governmental micromanagement It depends on up front governmental micromanagement: First, to acquire accurate information on which to base the overall capping schedule Second, to determine size of a massive number of company-by-company permits => Hugely complex computations and negotiations Almost certainly occurring behind closed doors in marathon processes Which, I fear, reopens possibility of massive well-funded corporate lobbying efforts Aimed at special corporate dispensations, blunting and/or corrupting results It's claimed this is exactly what's happening to EU's greenhouse gas C&T program E.G., a Carnegie Mellon study "Cap and Trade is Not Enough" which concluded: Facing economic stagnation, the EU has backed off their C&T targets Effectively undercutting the whole program 1)

14 Further, Cap and Trade lets "us" get off rather easilyAs discussed in my lectures on power consumption in transportation and housing: "Our" personal transportation and housing choices account for nearly half of the U.S.'s (spectacularly) high energy consumption Thus, as the majority of that energy production relied on greenhouse gas emissions, "our" personal choices drive almost half of the total U.S. greenhouse emissions Nevertheless, Cap and Trade has almost no directly perceivable effect upon us: Above, we got hit only via the increasing cost of Company A's product Wouldn't a program confronting us with the consequences of our choices produce dramatically quicker and larger reduction in greenhouse gas emissions? Pogo, by Walt Kelly, Post Hall Syndicate

15 Leading to idea of a more even-handed and visible Carbon TaxIt's ~ a negative value added tax where, for any step in a product's production that (at least eventually) produces greenhouses gases, a tax is added proportional to the amount of greenhouse gas released If CO2 is released, add a tax in proportion to that CO2 weight If another gas is released, scale the tax up or down Based on the ratio of that gas's greenhouse impact relative to CO2 Economists (vague on combustion?) talk of tax per equivalent tonne of C burned Scientists talk of tax per equivalent tonne of CO2 emitted One tonne of Carbon burned => (44/12) tonnes of CO2 emitted Based on the relative atomic masses of C (= 12) and CO2 (= 44) (1 tonne = 1000 kg ~ 1.1 "tons" - an antiquated, now virtually abandoned, primitive unit)

16 So the idea's simple - But I had trouble putting it into perspective!Because it seemed to raise all of these hard-to-answer questions: 1) How big would the tax have to be in order to drive down greenhouse emissions? Heck! MacKay discusses tax rates from $7 to $900 per CO2 tonne!!! 1 2) How would a certain level of tax affect ME personally? Requiring ME to figure out: How much greenhouse gas am I responsible for? 3) What would be the larger/longer-term impacts of the tax upon our economy? Which leads economists to ask: What is the true "Social Cost of Carbon?" = Idea that if the true/complete cost were actually charged, free market's Invisible Hand could then find the optimum solution I'll now try to figure out the answers to those questions 1) David J.C. MacKay, Sustainable Energy without the Hot Air, page 224 / Figure 29.2

17 What size tax is required to drive down greenhouse gas emissions?Throughout this class we've noted that wind energy is thriving: Now 5% of U.S. power, and our preferred target for new energy investment While in contrast, solar energy is struggling: Less than 1% of U.S. power With even that number dependent on government subsidies/programs In present day ~ free-market energy system, difference must be due to economics: Levelized cost of energy (LCOE) from wind IS competitive Levelized cost of energy from unsubsidized solar IS NOT competitive LCOE difference, added to fossil fuels, should make THEM non-competitive! = Plausible target value for an effective carbon tax

18 Recent LCOE data from my Economic Analysis lecture:EIA Lazard Bloomberg Coal: Advanced IGCC coal Sequestered IGCC Coal Natural Gas CC Natural Gas Peaking Hydroelectric Nuclear Biomass - no subsidy (subsidy) (67-100) Geothermal - no subsidy (subsidy) (74-140) Wind - no subsidy (subsidy) 73 dry/197 wet (14-67) 80 dry/210 wet Solar PV Si crystalline PV- no subsidy (subsidy) (46-66) 125 (w/ tracking) Thin Film PV – no subsidy (subsidy) (46-66) 125 (tracking?) Solar Thermal - no subsidy (subsidy) (96-105) 1) Lazard/Bloomberg = Solar Thermal WITH storage All data in units of $/MW-h

19 Comparing solar LCOE vs. wind LCOE from each data source:Value of LCOE for solar minus value of LCOE for onshore ("dry") wind = EIA: ~ 50 $/MW-hour Lazard: ~ 25 $/MW-hour Bloomberg: ~ 45 $/MW-hour Thus, a $/MW-hour cost difference makes solar energy non-competitive So a carbon tax that forced fossil-fuel power plants to charge that much more should also make those fossil-fuel power plants non-competitive Or, to accelerate the transition away from fossil fuels, we might want to set the Carbon Tax rate to twice that value

20 But we still have to figure out each power plant's carbon production:We can do this by answering a sequence of science/technology questions: 1) What fraction of each fossil fuel is carbon (by weight)? 2) How much combustion heat energy is produced per mass of fuel (in kJ/kg)? 3) What electrical energy is produced (by power plant) per fuel's heat energy? NG OCGT = Natural Gas using Open Cycle (single) Gas Turbine NG CCGT = Natural Gas using Combined Cycle Gas Turbines Coal = Natural Gas = Oil = Coal = 28,400 1 Natural Gas = 54,400 1 Oil = 45,300 1 Coal = NG OCGT = NG CCGT = Oil = ~ 0.4 4 1) Rubin, Introduction to Engineering & the Environment, Table 5.1 page 165 2) Example 5.1, Rubin, Introduction to Engineering & the Environment, page 166 3) 4) "Efficiency in Electricity Generation" - EURELECTRIC (impossibly long web link)

21 Combining these factors for each fuel:Throwing in factor of 44/12 to convert from mass C burned to CO2 emitted: CO2 Mass / Electrical Energy = [(44/12) (Fuel C Fraction)] ÷ [(Heat Energy / Fuel Mass) (Electrical Energy / Heat Energy)] In units of grams CO2 produced per kW-h of electrical energy produced: Versus final number alone, as found on various websites (in g CO2/kW-h): Coal = 865 NG OCGT = 486 NG CCGT = 295 Oil = 620 Coal = 989 NG = 803 Oil = 1020 (1) Coal = 1029 NG = 515 Oil = 758 (2) Coal = 1039 NG CCGT = 375 (3) Coal = NG OCGT = 700 NG CCGT = 450 Oil = 780 (4) 1) Rubin, Introduction to Engineering & the Environment, Table 5.2 page 168 2) https://en.wikipedia.org/wiki/Fossil-fuel_power_station 3) https://www.netl.doe.gov/publications/proceedings/01/carbon_seq/1b2.pdf 4)

22 Then extracting a sort of consensus value for each fuel:Also inserting data on IGCC coal 1 power that I did not have space for above And converting from kW-h to MW-h (as used in LCOE's) I conclude that for these fossil fuels, using the indicated power plant technology: Conventional Coal => tonne CO2 produced / MW-hour of electricity IGCC Coal => tonnes CO2 produced / MW-hour of electricity NG OCGT => tonnes CO2 produced / MW-hour of electricity NG CCGT => tonnes CO2 produced / MW-hour of electricity Oil => tonnes CO2 produced / MW-hour of electricity 1) From Carbon Fuels lecture: IGCC = Integrated Gasification (of coal) with Combined Cycle (dual turbines)

23 Then, to make each of these fossil fuels non-competitive:Wind vs. Solar analysis suggested LCOE's must rise ~ $/MW-hour Most of the above fuels produced roughly 1 tonne CO2 per MW-hour electricity Suggesting a Carbon Tax => $/tonne CO2 NG CCGT produced half the CO2, but to pressure it as hard we could double its tax: Carbon Tax => $/tonne CO2 Or, to speed shift away from fossil fuels, we might just tax all fuels at: Carbon Tax => 100 $/tonne CO2 My spreadsheet with a range of possible values for tax per CO2 tonne emitted:

24 So how will those possible Carbon Tax rates affect ME?The EIA says average U.S. household uses 911 kW-h of electrical power per month Which yields an annual household electricity consumption of MW-h Multiplying the table on the previous slide by that number, we then get: ADDED household cost per year, for a CO2 Tax per tonne at rate in red: (for that electrical energy produced via alternate fuels / technologies) An Introduction to Sustainable Energy Systems: WeCanFigureThisOut.org/ENERGY/Energy_home.htm

25 But MY power is generated by a mix of power plant types / fuelsFurther, I know that the mix of power technologies and fuels changes state by state From the NPR data on state power plant fuels in my Carbon Fuels lecture: 1 NPR did not break down if natural gas power was OCGT or CCGT So let me assume it is 50% of each Then, combine the weighting of this table with the preceding table to get: 1)

26 Added cost of electrical power per average household per year:For CO2 tax per tonne in red, and each state's 2014 methods of power generation: Vermont: CO2 tax has 0$ impact - because their power is 0% fossil fueled Most other states (with mixes of fossil-fueled and non-fossil fueled electricity): Added cost / household / year ~ 5 times the CO2 tax / tonne West Virginia (with 96% coal fossil-fueled electricity): Added cost / household / year ~ 10 times the CO2 tax / tonne

27 What about the impact on MY annual transportation costs?From website advocating carbon trading to support 3rd world forestry & farming: 1 Gasoline liberates ~ tonnes CO2 per gallon burned Assuming MY car gets 20 MPG And that I drive (alone) 12,000 miles by car each year (meaning that I burn 600 gallons of gasoline per year) Out and back 5500 mi jet trip emits 2 tonnes CO2 per passenger And assuming that I travel 12,000 miles by jet each year => MY added annual transportation costs for the CO2 tax rates per tonne in red: 1) COTAP = "Carbon Offsets to Alleviate Poverty" organization

28 Recapping my answers to this point:Carbon Tax necessary to NUDGE power production away from fossil fuels: ~ $ / equivalent tonne of CO2 emitted Carbon Tax necessary to SHOVE power production away from fossil fuels: ~ $ / equivalent tonne of CO2 emitted Impact on typical American's annual household power bill: States using totally greenish energy: 0$ States using ~ 50% greenish energy: ~ 5X the CO2 Carbon Tax Rate above States using ~ 0% greenish energy: ~ 10X the CO2 Carbon Tax Rate above Impact on individual American's annual transportation bill: For 12,000 automobile miles: ~ 5X the CO2 Carbon Tax Rate above For 12,000 jet miles: ~ 2X the CO2 Carbon Tax Rate above Total, for resident of 50% state: ~ 12X the CO2 Carbon Tax Rate

29 So we seem to be talking ~ $600-1200 per person per yearPLUS the rise in prices of purchased goods/services that also emitted carbon For which the ultimate payback would be reducing the presumably much LARGER cost of continued fossil fuel use Including health and environmental costs from its pollution, as well as possibly huge costs predicted to accompany global warming To which some might respond: But payoff is decades/generations in the future, humans don't think that far ahead! Sticky-fingered politicians would just use this as an excuse to add more taxes! What's the evidence that fossil fuel use or global warming will be so expensive? Reacting to those objections:

30 James Hansen's modest Carbon Tax proposal:James Hansen is an environmental scientist who used to work for NASA At NASA he and his colleagues studied the atmosphere Which got them into the subject of global warming Which then got them into big trouble with the Bush II administration Bush II officials (with high-level NASA cooperation?) tried to gag these scientists Preventing any contact with the press and censoring their presentations Which is an eye-opening history I urge you to further investigate 1-3 But today's relevance is that Hansen now advocates a unique Carbon Tax countering both human short-sightedness AND government's sticky fingers 1) New York Times: 2) Scientific American: 3) Union of Concerned Scientists: Page 1 of 4

31 Hansen's "Carbon Tax and 100% Dividend" proposal: 1Hansen suggests an immediate carbon tax on the order of $100 / tonne CO2 Which he estimates might cost the typical American $1200 per year Which is dead on my preceding estimates for a level that should SHOVE us toward diminished fossil fuel use But he would guarantee that we get all that tax back, almost immediately Specifically: We would each be sent a $100 refund check each month Actually, he suggests a direct bank deposit I doubt practicality of that, especially for many poorer citizens But while we'd all get the same FIXED MONTHLY REFUND, we could reduce our personal Carbon Tax PAYMENT by choosing goods & services NOT subject to the Carbon Tax 1)

32 => Revenue & tax neutral behavior-modification tool only!But by raising U.S. costs, wouldn't we just INVITE foreign imports? At least from countries that do NOT also impose a Carbon Tax? Well, China has also become extremely concerned with air pollution But yes, countries like India now seem unable to deal with this challenge So let me modify Hansen's proposal - Apply his tax to ONLY: - Fossil Fuels - Electrical Power And apply this "Hansen/Bean" tax regardless of the fuel/power country-of-origin: At U.S. Carbon Tax rate, minus Carbon Tax rate applied in country-of-origin This would be easy, transparent and fair (to all of the countries involved) AND This would still affect our two biggest sources of greenhouse gases! An Introduction to Sustainable Energy Systems: WeCanFigureThisOut.org/ENERGY/Energy_home.htm

33 OK, that's a climate activist's proposed solutionBut climate activism is controversial, at least in the United States So let's go back, instead, to the type of questions economists ask, such as: 1) What would continued use of fossil fuels really cost? 2) What level of carbon tax would accurately recover those costs? Economists try to answer such questions through the concept of an Externality: “An externality is an effect of some activity on an entity (such as a person) that is not party to a market transaction related to that activity.” 1 “In economics, an externality is the cost or benefit that affects a party who did not choose to incur that cost or benefit.” 1 I.E.: The full cost of an action may NOT be represented by its market price 1) https://en.wikipedia.org/wiki/Externality

34 An externality as defined via classic Supply and Demand curves:Red = Supply line of quantity vs. price Intersection => Market Cost Green = Demand line of quantity vs. price But Yellow = Social Marginal Cost = Complete cost to society vs. quantity Intersection of social marginal cost line and the supply line => More economically accurate value for true Social Cost of the product Market Cost – Social Cost = Externality (here there is a "negative externality")

35 Products with negative externalities are considered to be subsidizedMerriam-Webster defines subsidy as: “Money that is paid, usually by a government, to keep the price of a product or service low or to help a business or organization to continue to function (or) a grant by a government to a private person or company to assist an enterprise deemed advantageous to the public” The energy industry is ABSOLUTELY RIDDLED with subsidies! Some of which are well known, such as subsides for solar energy Some of which are hidden, such as huge tax breaks for fossil fuel production And then there are a raft of ongoing, non-governmental, subsides Such as allowing industries to pollute the air without paying for that pollution's health and environmental costs And lurking subsidies, such as not charging them for future costs of sea level rise

36 Post-tax subsidies = "failure to internalize negative externalities"Economists believe that subsidies effectively subvert the economic system Leading them to take the lead in trying identify all such energy industry subsidies An example of which was the 2015 International Monetary Fund publication: "IMF Working Paper: How Large Are Global Subsidies?" 1 Which concluded that, worldwide: Fossil fuels receive a $5.3 trillion annual subsidy = 6.5% of global GDP But of that, only $500 billion came via explicit government spending & tax-breaks Which economist's refer to as being: Pre-tax subsidies The much, much larger, but hidden, balance came from: Post-tax subsidies = "failure to internalize negative externalities" = Not taking product's full impacts (and thus true costs) into account 1) https://www.imf.org/external/pubs/ft/wp/2015/wp15105.pdf

37 Economists argue that all such "Externalities should be Internalized!"Which, translating into English, seems to mean that they should be eliminated Green "Supply – Private Marginal Cost" line would then RISE to overlay Yellow "Social Marginal Cost" line => A simple, but now accurate, Supply vs. Demand problem Or, falling into geek-speak, we would do away with G I G O: "Garbage in" (misinformation) => "garbage out" (inefficient economic solutions)

38 What does IMF identify as (largely invisible) "post-tax" externalities?It's tally of negative externalities due to fossil fuels: Global Warming = $ billion Local Air Pollution = $ billion Congestion = $ billion Accidents = $58.26 billion Road Damage = $9.48 billion Forgone Consumption Tax Revenue = $45.32 billion Or, for the U.S. alone (per year): (Visible) Pre-Tax U.S. Fossil-Fuel Subsidies = $13.29 billion (Largely invisible) Post-Tax U.S. Fossil Fuel Subsidies = $ billion

39 = Which we could now do by imposing a carbon tax!But critical IMF data was drawn from an almost inaccessible OECD report We wanted to see the source data! Luckily, it turns out that economists are really bugged by "negative externalities" Because they subvert the "invisible hand's" generation of economic solutions! Economists have thus studied energy's negative externalities for ~ two decades And they have generated a large and accessible body of (pre-IMF) research about both past AND future hidden costs of fossil fuels Further, they used this research to compute the Social Cost of Carbon (SCC), which, ideally, should now be added to the cost of fossil fuels = Which we could now do by imposing a carbon tax! But what is this social cost of carbon (as estimated by economists)? Wikipedia cites it as $48 / tonne C (=> $12 / tonne CO2) MUCH less than the behavior-modifying tax we discussed earlier!

40 So would our earlier "effective" carbon tax = An economic travesty?We found that a $/tonne CO2 tax would strongly curtail carbon emissions But if true societal cost of those carbon emissions is 12 $/tonne CO2 We'd be grossly distorting the operation of the economic system => Inefficiencies, waste, unnecessary pain & suffering, etc. So let's look at how economists came up with 12$/tonne CO2 figure: Wikipedia cites key publication with first author identified as "Yoh" Who turns out to be head of the IPCC committee that compiled the study Key work cited in that study is by German economist R.S.J. Tol who: 1) FIRST did his own research on Social Cost of Carbon (~ ) 2) THEN reviewed the SCC work of dozens of other economists Both roles AND their timing turn out to be very important!

41 Tol's summary of a SCC computations by all economistsComponents of SCC, expressed as percentages of Gross Domestic Product: Percent of Gross Domestic Product Versus year (1900 – 2100) Things economists think could benefit from climate change: Agriculture ( ), Energy (< 2025), Health (most of ) Things economists think could be hurt by climate change: Energy (> 2025), Ecosystems (post ~ 2000), Sea Level Rise ( )

42 The economists' reasoning: 1Agriculture benefits because plants grow better with more CO2 to consume Until late this century when heating + drought knock back their growth Energy consumption initially drops because of its decreased use for heating Until ~2025 when warming massively increases air-conditioning energy Health benefits from decreased impact of tropical diseases such as Malaria, Dengue Fever as jungles and wetlands dry out Ecosystems are damaged from ~2000 onward, But financial impact is miniscule compared to benefits above Sea Level Rise costs are similarly minimal Actually thought to be smaller in 21st century then in mid 20th century! 1) Estimates of the Damage Costs of Climate Change, Environmental and Resource Economics 21, pp (2002)

43 Do you have problems with any of that?You are in good company: Economists massively disagree with each other As revealed by study's alternate plots of TOTAL SCC cost, : <= Average Maximum => Minimum => <= Equity Weighted Average => Percent of Gross Domestic Product

44 Disagreement is also apparent in this table from one of Tol's reviewsDifferent table lines = SCC results calculated by different economists Note not only differences in cost numbers but even difference in signs!

45 But "elephant in the room" may actually be the DATE of those studies:Key cross-field review article (giving SCC, component by component) was: Estimates of the Damage Costs of Climate Change, Journal of Environmental and Resource Economics 21, pp (2002) But that was well before the maturation of our climate change models! (1996) (2001) (2007) (For discussion of those models see my lecture on Climatology and Climate Change)

46 The economists WERE aware of the this problem:As Tol, himself pointedly acknowledged in his 2009 SCC review paper: 1 "In a survey article I co-authored more than a decade ago on the social costs of climate change, we suggested that all aspects of the problem were roughly known, and that research would be complete within a few years. This view turned out to be so overoptimistic as to be entirely mistaken." 1) Tol 2009: J. Economic Perspectives 23(2), pp (2009)

47 He also acknowledged that they'd NOT considered catastrophic change:"Examples of extreme climate scenarios include an alteration of ocean circulation patterns (which) could lead to a sharp drop in temperature in and around the North Atlantic . . . (Or) collapse of the West Antarctic Ice Sheet which would lead to a sea level rise of meters in a matter of centuries. (Or) the massive release of methane from melting permafrost which would lead to rapid warming worldwide. (These) have the potential to happen relatively quickly, and if they did, the costs could be substantial . . . Effects of sea level rise would increase ten-fold should the West Antarctic Ice Sheet collapse. But the work of Olsthoorn, van der Werff, Bouwer, and Huitema suggests that this may be too optimistic." 1 1) Tol 2009: J. Economic Perspectives 23(2), pp (2009)

48 Let me look at just his sea-level-rise cost estimates:In 2002 he generated this table for impact of century long 1 meter rise in sea level He noted that this was a higher rise than the IPCC then predicted: "OECD A" and "OECD E" refer to North America and Europe respectively: North America: 1 meter sea level rise => 130,000 displaced persons Europe: 1 meter sea level rise => 220,000 displaced persons

49 This was then folded into the economists' SCC estimate of 12$/ tonne CO2This result was based on most elaborate climatological studies available in 2002 But a decade later more (& more sophisticated) studies have now been published Including one published in March 2016 issue of Nature Climate change entitled: Millions projected to be at risk from sea-level rise in the continental United States From that research paper's abstract: "We find that a 2100 SLR (Sea Level Rise) of 0.9 meter places a land area projected to house 4.2 million people at risk of inundation, whereas 1.8 meters affects 13.1 million people" Take a look at that paper's state-by-state predictions: An Introduction to Sustainable Energy Systems: WeCanFigureThisOut.org/ENERGY/Energy_home.htm

50 State-by-state predictions of population affected by sea level rise:Or the same data shown on a U.S. coastal map: An Introduction to Sustainable Energy Systems: WeCanFigureThisOut.org/ENERGY/Energy_home.htm

51 Note that this shows counties affected rather than actual flooding boundaries

52 TWO things have changed from the time of the economist's work:1) In 2002, IPCC had been estimating sea level rises of less than 1 meter, Whereas sea level rises of up to 1.8 meters are now seriously discussed 2) For even a 1 meter rise, vastly greater impact is now predicted Tol 2002: 1 meter rise impacts 130,000 people over whole of North America New Study: 0.9 meter rise impacts 4,310,981 in the U.S. alone How could 1 meter rise now threaten ~ 50 TIMES more people? The answer comes one sentence later in Tol's earlier musings: "Effects of sea level rise would increase ten-fold should the West Antarctic Ice Sheet collapse. But the work of Olsthoorn, van der Werff, Bouwer, and Huitema 2 suggests that this may be too optimistic: that we may have overestimated the speed with which coastal protection can be built up" 2)

53 So discrepancy is not in HOW MANY would be affected by a 1 meter riseDiscrepancy is in HOW those people would be affected! Economists had assumed ocean barriers could prevent ~ all encroachment Cutting number having to relocate from millions to hundreds of thousands Was that really EVER plausible given the length of U.S. coastline? Further, those economists assumed COST of such construction would be so palatable that the total Social Cost of Carbon would still be only 12$ / tonne CO2 Instead, economists Olsthoorn, van der Werff, Bouwer, and Huitema (from the the world's premiere dike-building country of the Netherlands) had warned from the start about the difficulty of holding back the sea!

54 And it is not just one report:The IPCC's 5th Assessment (2013) has also upped predictions of sea level rise: 6 Violet ("RCP2.6") = With strong international efforts to curb greenhouse gases Orange ("RCP8.5") = Without such efforts 1 Meter 6) https://www.ipcc.ch/pdf/assessment-report/ar5/wg1/WG1AR5_Chapter13_FINAL.pdf

55 Further, Paris Summit may leave door open to catastrophic change:That fall 2015 meeting declared a goal of no more than 2°C warming by 2100 A goal that is supported by (at best) weak commitments & enforcement But climatologist Hansen and his colleagues have now predicted that 1.5°C might be enough to trigger collapse of Arctic or Greenland ice sheets 7 Which would make STRONG corrective measures imperative! But we have now see that while: Early economic studies suggested Social Cost of Carbon of ~ 12$ / tonne CO2 Which is far less than $ / tonne CO2 value that I estimated would be adequate to SHOVE power production away from fossil fuels Newer studies, consistent with the economists' own earlier doubts, suggest that revised Social Cost of Carbon MAY be ~ $ / tonne CO2 7)

56 Putting this all together:A carbon tax of about $100 per tonne of CO2 (equivalent) emitted: WOULD offset current cost disadvantages of emerging energy alternatives DOES apparently represent the true hidden costs of fossil fuel emissions Which means that Carbon Taxes DO meet David McKay's closing call for: An idea that DOES add up! Leaving us with David's remaining calls to: "Stop staying no and start saying yes!" (to this, or alternatives) And to start working toward implementation of such ideas Bringing me to end of this class, with just one more thing to add:

57 IN MEMORIAM – APRIL 2016 Obituary (The Guardian)THANK YOU DAVID IN MEMORIAM – APRIL 2016 Obituary (The Guardian)

58 Credits / AcknowledgementsSome materials used in this class were developed under a National Science Foundation "Research Initiation Grant in Engineering Education" (RIGEE). Other materials, including the "Virtual Lab" science education website, were developed under even earlier NSF "Course, Curriculum and Laboratory Improvement" (CCLI) and "Nanoscience Undergraduate Education" (NUE) awards. This lecture grew out of collaborative research by Gordon Knapp (UVA class of 2018) and Prof. John C. Bean Copyright John C. Bean (However, permission is granted for use by individual instructors in non-profit academic institutions) An Introduction to Sustainable Energy Systems: WeCanFigureThisOut.org/ENERGY/Energy_home.htm