Risk

We are not very good at estimating risk. This is especially true of large, infrequent risk. Recently a judge fined BP for being “grossly negligent” in the blowout on the deep water horizon oil rig disaster that killed 11 workers and spilled millions of gallons of oil into the Gulf of Mexico. The judge also stated that the company acted with “conscious disregard of known risks” and that its “conduct was reckless.” With his verdict, the judge confirmed the possibility of new fines of up to $18 billion in addition to the billions that BP has already spent on the disaster.

Some doubt that BP can survive the additional fines and the major setback to the company’s reputation, but many others disagree and claim that the company is both large and profitable enough to be able to survive them. There is no question in my mind that the decision will change the risk assessment of deep water drilling and the business models of such drilling. I have no idea if BP was insured against such a disaster but I am confident that they will have a very difficult time going forward in finding any insurance company willing to serve them against any such future event.

This was a major disaster, but in the global scheme, it was not completely irreversible. Global consequences of climate change, meanwhile, are on a much larger scale, and we cannot rely much on guidance from past events. I addressed this important issue in my book (Climate Change: The Fork at the End of Now. Momentum Press, 2011), as many others have done in the past. Here are two short excerpts from my book:

The profitability of the insurance industry critically depends on its ability to assess risk, defined as:

loss potential = occurrence x frequency.

Can we insure the survival of the planet as a habitable environment? If the answer is yes, then who and how will pay the premium? If climate change is just a big catastrophic event, then the mechanism of financial preparation should not be much different than the insurance of present catastrophic events. The trouble is that we are not very good at insuring catastrophic events.

Are we better at recognizing small, everyday, events in which risk plays a role?

Every Saturday morning, throughout most of the year, we have a green market not far from where I live. It’s great – you get fresh produce and you meet friends and neighbors. Right now it’s corn season. The photographs below show one of the fresh corn stands. They look great

Corn_Blog1 Corn_blog2

The top photograph shows the stand itself before customers have started to explore the merchandise. It’s a beautiful collection of sweet corn ears with the price of $2 for 3 ears clearly posted.

However, there is a risk involved in the purchase: we don’t see the kernels inside. We have no idea if some of them are missing, rotten or otherwise damaged. In principle the price should reflect this uncertainly. However, some customers want to eliminate that risk, so they peel back the husk to get a good look at the kernels. The second picture shows one such customer. He checks each ear and puts any damaged ones back into the pile. Obviously, other customers that want to buy the corn will not touch those ears now that they can see their flaws. The risk falls entirely on the seller. I do not know the profit margin of the seller or whether he takes this practice into account. My guess is that he does. In that case, the customers that peel the husks away before buying the corn are shifting the risk to the rest of the customers who play by the rules.

Some of the approaches to storm adaptation and sea level rise on a local level rely on sea walls and other blocking structures (April 30, 2013 blog). These measures end up shifting both the rising water level and therefore the risk to neighboring locations, making it even more costly to everyone else. Climate change, and the associated sea level rise are global issues. If we continue with the corn analogy, those who set up such blocking structures are peeling back the corn, but all of us pay for the increased risk.

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Income Inequality – Climate Change

I just came back from a very intense week in Israel. I went there in the “middle” of a war between Hamas and Israel, which paused for a cease-fire a day after my arrival. This war has been between a well-run state with probably the best army and technology in the Middle East, and a small group in control of a piece of land that supports 1.8 million people. The group declared its motivation as hatred for Israel. The inequality of strength between the two antagonists forced Hamas to take up a strategy that included use of civilians as shields. The result was many civilian casualties, mass destruction and suffering by innocent people caught in the middle.

The question I was asked most often in Israel this week was what Americans think about the conflict. This question came sharply into focus by way of a young American relative of mine who recently married an Israeli and now lives with him in Israel along with her newborn baby. She said that her Facebook page is full of condemnations of Israel by her American friends that are appalled by the force imbalance and the civilian casualties. She has started to post her own responses to try to shift the balance to a bit more objective stand.

My answer in these conversations was that the US public opinion is now occupied with extreme unrest all throughout the world, including the conflicts of Ukraine-Russia; ISIS – Syria and Iraq; Somalia, South Sudan, Libya, Boko Haram, etc. With reluctance to dig a bit deeper into the causes, many Americans blame President Obama for causing the unrest or not doing enough to re-equilibrate the world. The conflict between Hamas and Israel doesn’t occupy much of their attention in comparison. Many are now taking the position that it is just another example of the craziness happening in the world right now. Blaming the American president is an easy vent for all this frustration. This attitude encounters great sympathy in Israel. My thoughts, however, have (characteristically) expanded beyond the present into the future.

International laws of war are designed to regulate wars and conflicts between nations with regular armies – not wars or deadly conflicts between organizations such as Hamas, ISIS, Hezbollah and Boko Haram. Extreme inequality and despair leads to international terrorism, and we are starting to see this trend swamp almost every corner of the world. Tom Friedman, in the TV documentary series, “Years of Living Dangerously” (May 27, June 3, 2014 blogs) associated the unrest in Syria, Egypt and Yemen with climate change-induced droughts that led to severe water stress. Israel is in the same region, with a similar climate, yet – drought or no drought – it doesn’t suffer from water stress. Instead, Israel serves as an example of efficient water management (March 4, 2014 blog). One of my talks in there focused on this issue.

My course on Physics & Society is anchored largely on the US National Intelligence Council’s (NIC) periodic report on global trends. They consider income inequality a very important trend to follow. Other trends include: population growth, economic growth, power distribution, environmental impact, climate change, science & technology, energy, water and food. These trends are all strongly dependent on each other, and the intelligence communities in every country are very interested in them because they have major impacts on security. In the modern world, with global, sophisticated, communication capabilities, desperate people find ways not only to confront people and nations that are much better off but also to communicate with each other to coordinate supporting activities. Physics tells us (again, the famous 2nd Law of Thermodynamics – see last week’s blog) that destruction is much easier than rebuilding. It is now being estimated that what was destroyed in the three weeks of conflict between Israel and Hamas will take 20 years to rebuild (assuming that there will be no more war – a big assumption).

In my November 26, 2012 blog I discussed climate change in terms of the IPAT equation that states:

Impact = Population x Affluence x Technology

It turns out that the strongest impact on climate change, in the form of greenhouse gas emissions, is in the Affluence term (measured as GDP/Capita). As I discussed in last week’s blog, the income inequality between developed and developing countries is decreasing rather than increasing, as their economic growth is on average twice or three times faster than that of developed countries. As I said then, China has become the largest emitter of carbon dioxide, but it still remains a far smaller emitter on a per capita basis than the USA. By all estimates, the mid-21st century world will be much more dominated, both demographically and economically, by citizens of what we now label as developing countries. The world cannot accomplish the necessary energy transition to sustainable energy sources unless the developing countries can be convinced that the shift will not hinder their efforts to close the gap in the standard of living between them and the developed countries. Their citizens would not allow such a presumably unfair tradeoff.

Climate change is a global phenomenon that requires global cooperation. On the other hand, the most important impact of climate change comes through the water cycle (search for all the entries on “Water Cycle” in the blog). This manifests itself in the form of droughts, floods, extreme weather events and the rise in sea level. Since we don’t have a global government, the adaptations to most of these impacts will necessarily be local. Adaptations require resources, however, which means that while they are readily available to those who can afford them, they remain out of reach for those who cannot. The poor cannot adapt and many of them will turn, instead, to violence. Since, in general, this violence is not sanctioned by sovereign states, we define it collectively as terrorism.

In the end, extreme inequality makes all of us miserable and we had better look for ways to realize soon that we are together on this planet and need to start caring for (and about) each other. If things look bad now, there is no question in my mind that in a “business as usual” scenario, the world will be a much scarier place toward the end of the century – my definition of “The End of Now.”

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Income Inequality – Science Magazine

Science Magazine is addressing inequality; on May 23rd, they came out with a special issue dedicated to the science of the topic (not exclusively – there is other stuff in the issue as well). Other special issues of Science this year have included Exploring Martian Habitability, Visualization Challenge, Crystallography, Breast Cancer, the Gas Surge, Strategies Against HIV/Aids, Slicing the Wheat Genome, Vanishing Fauna, and Parenting, so we are in good company! I am including a table of relevant articles below:

Table of the relevant articles in the issue:

  • A world of difference by Emily Underwood.
  • The ancient root of the 1% by Heather Pringe.
  • Our egalitarian Eden by Elizabeth Pennis
  • Tax man’s gloomy message: the rich will get richer by Eliot Marshall
  • Physicists say it’s simple by Adrian Cho.
  • Can disparities be deadly? By Emily Underwood.
  • While emerging economies boom, equality goes bust by Mara Hvistendahl
  • Tracking who climbs up-and who falls down-the ladder by Jeffry Mervis
  • Review – Inequality in the long run by Thomas Piketty and Emanuel Saez
  • Review – Skills, education and the rise of earning inequality among the “other 99%” by David H. Autor.
  • Review – Income inequality in the developing world by Martin Ravallion.
  • Review- Intergenerational transmission of inequality: material disadvantage and health at birth by Anna Aizer and Janet Currie
  • Review – On the psychology of poverty by Johannes Haushofer and Ernst Fehr

The list reflects a mixture of short introductory pieces, and various other segments on the topic followed by with short review articles. Piketty (together with Emanuel Saez) makes a contribution on the same topic as his book, but this time it is a much shorter piece and considerably more quantitative. There is no way for me to try to cover all the topics addressed – both the volume of information and the prerequisites required for comprehension make that impossible in this setting. Science Magazine readers are not required to be experts in the fields but the material does require some background in science and math. I chose instead to make some comments on three pieces:

  1. “Physicists say it’s simple” by Adrian Cho – for the obvious reason that I have a similar interdisciplinary background as the author.
  2. “The ancient roots of the 1%” by Heather Pringe – to demonstrate that tax records are not the only evidentiary material for income inequality, as implied by Piketty’s work and that income inequality is not necessarily destined to increase indefinitely.
  3. “Income inequality in the developing world” by Martin Ravallion – this quantifies some of the criticism of Piketty’s work (as I mentioned in last week’s blog) and relates to the fact that inequality of many of the developing countries as compared with the developed countries is decreasing as evidence of the much higher economic growth rates of these countries.

I will not try to summarize the articles here but will instead take key sentences and/or paragraphs that demonstrate the points. I strongly encourage everybody to go to the original Science articles and try to read them as they were intended to be read.

Physicists say it’s simple:

Adrian Cho is a physicist that turned to economics. He starts with a sentence that is classic for this kind of article: “If the poor will always be with us, an analogy to the second law of thermodynamics may explain why,” and follows it up with a short explanation:

The argument builds on the century-old kinetic theory of gases, in which physicists asked: What is the most probable distribution of the energies of the molecules in a gas? Yakovenko and a colleague argued in 2000 in The European Physical Journal B. “The exponential distribution is what you would call natural inequality—what you would get from entropy,” Yakovenko says.

This is not the place to argue with the analogy. I’m sure that I have mentioned the second law of thermodynamics often enough throughout my blog to convince everybody that almost everything in the Universe can be defined as physics. My wife (a psychologist) threatens to divorce me every time that I use that argument, and she is probably right to do so.

The ancient root of the 1%:

The article starts with the following sentence, “Don’t blame farming. Inequality got its start among resource-rich hunter-gatherers.” It then continues to develop the historical evolution of economic inequality mainly based on archeological and anthropological evidence:

Such economic disparities were common in the Roman Empire, where 1.5% of the empire’s households controlled 20% of the income by the late 2nd century C.E., according to one recent study.

Inequality has deep archaeological roots. Yet if existing traditional societies are any guide, our hunter-gatherer ancestors were mostly egalitarian (see sidebar, p. 824). How and when did a few members of society begin to amass wealth? Relying on evidence from the Near East, researchers suggested that the earliest elites emerged after 10,500 years ago, when people successfully domesticated plants and animals and settled in large permanent villages. In this view, agriculture led to the production of surpluses and the emergence of managers, craftspeople, and other specialists, who eventually gained control over extra resources.

Now, analyses of archaeological sites as well as ethnographies of traditional societies are etching a more complex picture, suggesting that some ancient hunter-gatherers may have accumulated wealth and political clout by taking control of concentrated patches of wild foods. In this view, it is the ownership of small, resource-rich areas—and the ease of bestowing them on descendants—that fosters inequality, rather than agriculture itself.

Income inequality in the developing world:

Science 2014 May 344(6186) 851-5, Fig. 1This short review summarizes inequality data for 130 developing countries by using household surveys. The measure of inequality (MLD) was designed to differentiate between inequality within countries and inequality between countries. It is designed to have similar characteristics to the more widely used Gini Coefficient, where MLD = 0 represents perfect equality while MLD = 1 represents “perfect” inequality, where all of the resources are concentrated in a single hand. One of the criticisms of Piketty’s work that I mentioned last week was that the inequality in the developing countries is decreasing, not increasing. The figure shows this is true (at least from 1980) for inequality between countries, but it is not true for inequality within countries, which seems to increase with time.

The same issue has another related article, “While emerging economies boom, equality goes bust,” by Mara Hvistendahl that deals with individual big developing countries like China and India and arrives at the same conclusion.

I will conclude this blog with a very short description of a course that I teach to senior undergraduate and graduate students in physics: “Physics and Society.” Part of the rationale for the course reads as follows:

Merriam Webster Dictionary defines Physics, among other definitions, as: science that deals with the structure of matter and the interactions between the fundamental constituents of the observable universe. The goal of physics is to formulate comprehensive principles that bring together and explain all discernible phenomena.

With a population of 7 billion people (October 2012) and growing, humans are unquestionably part of the physical environment.

Most of our graduate students see a Masters degree as the end of their education, one that holds the promise of increased job opportunities. The course’s objective is to explore career opportunities beyond the usual boundaries of textbooks, expanding to include real-world applications that are not restricted to textbook physics. Income inequality is an important topic in this course.

* As always, I welcome questions and comments about my blog, my book, and my work in general. In an effort to reduce the influx of spam, and in the interest of spending my time addressing actual messages (instead of sorting through junk), I ask that you please send any questions to one of the following addresses, with the title, “Comment about CCF blog.”

micha (no space) tom (at) brooklyn (dot) cuny (dot) edu

or info (at) lcgcommunications (dot) com. Thank you for your continued readership and your feedback.

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Inequality – Responses to Piketty

In last week’s blog, I focused on Piketty’s book and my reading of it. As I mentioned there, the volume of responses to the book was overwhelming. Some of the responses focused on the book, but many of them tackled the issue itself. Not surprisingly, there was a considerable amount of repetition in the responses. As I promised last time, this blog will summarize some of the main issues that they raised. Because this blog is focused on public responses, I have compiled excerpts of responses, mostly as posted in the “New York Times,” my main source of information on current events.

I will start with the obvious: Nicholas Kristoff’s Op-Ed in the “New York Times,” (July 24, 2014) entitled: “An Idiot’s Guide to Inequality.”

He starts with restating the observation that Frank Rich made (see last week’s blog) about the book’s low score under the “The Hawking Index.” Here are his exact words:

We may now have a new “most unread best seller of all time.” Jordan Ellenberg, a professor of mathematics at the University of Wisconsin, Madison, wrote in The Wall Street Journal that Piketty’s book seems to eclipse its rivals in losing readers: All five of the passages that readers on Kindle have highlighted most are in the first 26 pages of a tome that runs 685 pages.

Unlike, Frank Rich’s, which reviewed Hillary Clinton’s book, Kristoff’s Op-Ed zeroes in on Piketty’s book. As a remedy for the book’s low readership, he introduces us to the “Idiot’s Guide to Inequality.” Here are the elements of his “guide”:

First, economic inequality has worsened significantly in the United States and some other countries. The richest 1 percent in the United States now own more wealth than the bottom 90 percent. Oxfam estimates that the richest 85 people in the world own half of all wealth. The situation might be tolerable if a rising tide were lifting all boats.

Second, inequality in America is destabilizing. Some inequality is essential to create incentives, but we seem to have reached the point where inequality actually becomes an impediment to economic growth. Certainly, the nation grew more quickly in periods when we were more equal, including in the golden decades after World War II when growth was strong and inequality actually diminished. Likewise, a major research paper from the International Monetary Fund in April found that more equitable societies tend to enjoy more rapid economic growth.

Third, disparities reflect not just the invisible hand of the market but also manipulation of markets. Joseph Stiglitz, the Nobel Prize-winning economist, wrote a terrific book two years ago, The Price of Inequality, which is a shorter and easier read than Piketty’s book. In it, he notes: “Much of America’s inequality is the result of market distortions, with incentives directed not at creating new wealth but at taking it from others.”

Fourth, inequality doesn’t necessarily even benefit the rich as much as we think. At some point, extra incomes don’t go to sate desires but to attempt to buy status through “positional goods” — like the hottest car on the block.

Fifth, progressives probably talk too much about “inequality” and not enough about “opportunity.” Some voters are turned off by tirades about inequality because they say it connotes envy of the rich; there is more consensus on bringing everyone to the same starting line.

One might think that since Standard & Poor’s is a rating agency, it doesn’t have a political agenda, yet – for the first time – they have identified that inequality is causing slow economic growth. Here is their reasoning, as reported by Neil Irwin in the “New York Times” (August 6, 2014) in his article, “A New Report Argues Inequality is Causing Slower Growth. Here’s Why It Matters”:

I asked Beth Ann Bovino, the chief U.S. economist at S.&P., why she and her colleagues took on this topic. “We spend a lot of time trying to think about what the economic outlook is and what to expect ahead,” she said. “What disturbs me about this recovery — which has been the weakest in 50 years — is how feeble it has been, and we’ve been asking what the reasons behind it are.” She added: “One of the reasons that could explain this pace of very slow growth is higher income inequality. And that also might also explain what happened that led up to the great recession.

”From my research and some of the analysis I saw from others, when you have extreme levels of inequality, it can hurt the economy,” she said.

Because the affluent tend to save more of what they earn rather than spend it, as more and more of the nation’s income goes to people at the top income brackets, there isn’t enough demand for goods and services to maintain strong growth, and attempts to bridge that gap with debt feed a boom-bust cycle of crises, the report argues. High inequality can feed on itself, as the wealthy use their resources to influence the political system toward policies that help maintain that  advantage, like low tax rates on high incomes and low estate taxes, and underinvestment in education and infrastructure.

As I mentioned last week, one of my main reservations about Piketty’s book was his use of the word, “global,” when he mainly looked at France, England and the US, only occasionally mentioning other countries, most of which are already developed. Piketty recognizes this deficiency, but has argued that he lacks sufficient data about developing countries to continue his studies there. Here is what the “New York Times” wrote on this issue (July 20, 2014) in an article titled, “Income Inequality is Not Rising Globally, It’s Falling”:

Income inequality has surged as a political and economic issue, but the numbers don’t show that inequality is rising from a global perspective. Yes, the problem has become more acute within most individual nations, yet income inequality for the world as a whole has been falling for most of the last 20 years. It’s a fact that hasn’t been noted often enough.

Inequality is rising because the return on capital is considerably larger than that on labor; Piketty’s solution is to “simply” tax capital above a certain threshold. He recognizes that the taxing would have to be global because otherwise people with capital will run to the nearest tax haven or area with the lowest tax rates (The new term for this, when applied to this phenomenon in business, is “inversion.”). The “New York Times” (July 21, 2014) addresses this issue as well:

Sean Hannity, the Fox News prime-time host, threatened last month to leave New York for a tax haven down south. Tiger Woods transplanted himself from California to Florida for the same reason. The actor Gerard Depardieu decamped from France and sought citizenship in Russia after complaining that 85 percent of his income was consumed by taxes.

“I can’t wait to pay no state income tax down in Florida or Texas,” Mr. Hannity, who lives in Nassau County, said. “I haven’t decided yet, but I’m leaning Florida because I like the water and I like to fish.”

But a new analysis being released Monday undermines the frequent assertion that wealthy people reflexively flee New York City — where Mayor Bill de Blasio campaigned to raise taxes on those who make more than $500,000 — for low-tax states.

The study, by the city’s Independent Budget Office, found that the share of higher-income households that moved from the city in 2012, 1.8 percent, equaled the share of lower-income households that left.

Next week, I will leave off of Piketty, but not the issue of inequality. I will cover the May 23rd “Science” magazine dedicated to inequality, which – in a sense – suggested (to me) a stamp of approval for incorporating inequality into the sciences.

* As always, I welcome questions and comments about my blog, my book, and my work in general. In an effort to reduce the influx of spam, and in the interest of spending my time addressing actual messages (instead of sorting through junk), I ask that you please send any questions to one of the following addresses, with the title, “Comment about CCF blog.”

micha (no space) tom (at) brooklyn (dot) cuny (dot) edu

or info (at) lcgcommunications (dot) com. Thank you for your continued readership and your feedback.

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Income Inequality – Piketty

Summer is about to end and school will start soon. In a few days I will be going on a short trip to Israel to give two talks – one at the Weizmann Institute about water management and climate change, and the other at my high-school reunion. The one at the Weizmann Institute will focus on attempts to ensure that 75 years from now the world will be safe for our grandchildren and their grandchildren. The talk at my school reunion will focus instead on my own attempts to facilitate communication between my generation and that of our grandchildren, using my family as an example. There will be three days between the talks, and the subject matter will cover a span of about 150 years. It makes me feel like a mini Methuselah (according to the Bible he died age 969), which makes life interesting. I have often focused here on the issue of connecting the distant past with an equally distant future, and I will continue to do so.

In the next few blogs before my trip I would like to focus on an issue that is especially important presently – income inequality. I have addressed the subject before, specifically in the February 4, 2013 blog in connection with sustainable economic growth, and the January 7, 2014 blog as it relates to population growth. However, this year the issue took on a new dimension. On the political side it started with the election Bill de Blasio as New York City’s new mayor, and his campaign cry to try to address the city’s growing inequality. The publication of Thomas Piketty’s book, Capital in the Twenty-First Century, (translated to English by Arthur Goldhammer), only served to amplify the importance of the issue.

I am a physicist (trained as a physical chemist), and I teach two courses in which income inequality plays an important role: climate change and “Physics and Society.” In both courses whenever I mention inequality, my students’ typical response is: “Why should we care? We are here to end up on top.” Both courses are highly interdisciplinary and deal with subjects that I never studied in school; instead, I have tried to self-educate myself throughout the years. Economics is probably the most important of these disciplines. In the more than two years that I have been writing this blog, it has surfaced repeatedly. As a result, I decided to spend part of my recent vacation-work trip to Europe (June 10, 24, 2014 blogs) trying to read Piketty’s book in full. I did it (all 700 pages worth :( )! When I came back I read Joseph Stiglitz’s new book, The Price of Inequality (W.W. Norton & Company, 2013). I also found that “Science” magazine, one of the most prestigious scientific journals, dedicated a significant fraction of its May 23rd issue to articles about inequality. In a sense, this summer was the summer of inequality for me and I want to share some of it with you.

I will start with Piketty’s book, continue through some of the many public reviews and comments that have shown up on an almost daily basis since its publication (April 2014), follow up with highlights from the Science issue and finish with attempts to correlate all of this with sustainability and climate change. Throughout this series of four blogs I will intersperse my own takes on these issues.  To put it into perspective, Frank Rich in an article in New York Magazine (August 12, 2014; page 46 ) titled “Good Hillary, Bad Hillary” described a new statistical tool called, “The Hawking Index,” which examines readership. It was created by Jordan Ellenberg, a Wisconsin Mathematician. The index is named after Stephen Hawking’s book, A Brief History of Time, about the beginning of the Universe in the Big Bang. The index is supposed to compute how thoroughly best sellers are being read (For example, Donna Tart’s Goldfinch scored a whopping 98.5%). At the bottom of the index, breaking Hawking’s previous low of 6.6%, came Thomas Piketty’s Capital in the Twenty-First Century with a score of 2.4%.

Regarding Hawking’s book, I still remember an episode in London when I tried to buy the book as a present for my stepfather. I went to a reputable book store and asked for the book; they sent me to the History section. I immediately realized, (this was many years before the creation of the “Hawking Index”), that popularity and readership are not necessarily the same.

Piketty bases his analysis on detailed examination of data and the argument that capitalism is based on two fundamental laws. This sounds similar to Physics, where significant parts of the macroscopic physical environment are based on the 1st and 2nd laws of thermodynamics (you can use the Search button on the side to see previous mentions of thermodynamics in this blog). The laws are very simple and are given in a form of two formulas:

  1. α = r×β
  2. β = s/g

α is the share of income that comes from capital; β is the ratio of capital to the national income; r is the rate of return from capital; s is the savings rate and g is the growth rate.

To use two numerical examples from the book: in equation 1 if β = 600% and r = 5% it follows that α = 30%. Likewise, in equation 2, if we say that the savings rate (s) is 12% and the growth rate (g) is 2%, it implies that β = 600%. Significantly, the second law implies that a country that saves a lot but grows slowly accumulates large capital (relative to its income). Piketty places the two laws at the heart of the central contradiction of capital. Put simply, if the return on capital is greater than the general growth of the economy, then this will inevitably lead, over time, to those with capital increasing their wealth in relative terms, until they eventually own all capital and thus put an end to capitalism itself. With the return increasing over time, when given access to various assets, capital will get a larger share of income. In fact, when wealth is inherited and can be diversified, the returns are higher than in case of an individual who has limited wealth and prefers safer avenues which earn lower returns.

A typical data set on which his analysis is based, is given below:

The figure is in the book but in a bit less attractive form at least in my version of the book (the electronic version). I took this version from Google images instead.

The figure is in the book but in a bit less attractive form at least in my version of the book (the electronic version). I took this version from Google images instead.

The figure depicts the share of total national income held by the top percentile of the population in four Anglo-Saxon countries over the 20th Century. Similar trends can be seen in the French data. It is obvious from the graph that over most of this time, the share of income does not obey the “basic laws of capitalism,” because the share of income held by the top percentile is actually decreasing, not increasing as the laws would predict. Piketty claims that the laws are not obeyed over this period because the period was dominated by the two World Wars in which massive capital was destroyed. This is certainly true in France and Germany, which are not shown here, but the claim is a bit questionable, to a variable degree, for the four countries shown in the graph. Regardless, for what it is worth, based on the two laws, the claim itself that capital grows considerably faster than income makes sense (at least to me).

Another important issue is that the claim of global behavior, which he uses as a predictor for the future, is based mainly on three countries: France, England and the USA. The analysis and the predictions are based on analysis of historic data and Piketty was not able to find similarly extensive data sets for other countries. This is problematic for numerous reasons.

Be that it as it may, I return to my students’ recurring question – so what? If some guys are getting richer and the standard of living (in real $) for most of the rest of the 99% remains approximately the same (and we belong to the 99%), why should we care? Why not just strive to join the 1% and let the magic of the free market work its way?

I will try to address some of these questions and how they relate to the book in the next three blogs. Meanwhile, I’d like to finish here with an observation unique to the US. A recent US Supreme Court decision, which passed by a margin of 5:4, started with the following paragraph:

In the Court’s plurality opinion, Chief Justice John Roberts wrote, “The right to participate in democracy through political contributions is protected by the First Amendment, but that right is not absolute. Our cases have held that Congress may regulate campaign contributions to protect against corruption or the appearance of corruption. See, e.g., Buckley v. Valeo, 424 U.S. 1, 26-27 (1976) (per curiam).”

The resolution states that spending money on an election is protected by the First Amendment, as is free speech. The only exception is that Congress may regulate campaign contributions to protect against corruption or the appearance of corruption. This means that the ever-increasing share of capital owned by the top 1% of the population – a resource that provides this group with the unopposed ability to sway elections – cannot be limited by Congress. Using such monetary expenditure to gain more and more influence on the political process, resulting (for example) in the lowering of taxes, modification of antitrust legislation or reduction of welfare payments, is not considered “quid pro quo,” meaning that it is not considered corruption or appearance of corruption, and thus cannot be limited.

* As always, I welcome questions and comments about my blog, my book, and my work in general. In an effort to reduce the influx of spam, and in the interest of spending my time addressing actual messages (instead of sorting through junk), I ask that you please send any questions to one of the following addresses, with the title, “Comment about CCF blog.”

micha (no space) tom (at) brooklyn (dot) cuny (dot) edu

or info (at) lcgcommunications (dot) com. Thank you for your continued readership and your feedback.

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Energy Storage Selection

This will be the last blog to deal directly with storage technologies. I listed the various technologies in the July 29th post, then followed that up last week, mainly focusing on estimates of future capacity and the investments that will be needed to decarbonize the energy supply. The necessarily increased reliance on sustainable energy sources requires investing in technologies that separate energy generation from energy use, users from producers. If we go into the specifics of the storage technologies that I mentioned in the July 29th blog, the following picture emerges:

Capital Cost Per Unit Power

Power quality determines the compatibility between various types of electrical power and consumer devices. An important consideration in such a match is that the supply power must be uninterruptible (UPS). I have discussed the difference between energy and power before; here, the horizontal axis refers to the initial capital cost for the storage device per unit of power (in kw) that it can deliver, while the vertical axis refers to the cost per unit of energy stored over the lifetime of the device.

Cost is not the only consideration that determines which technology to use. The uninterruptible power requirement necessitates that the system be able to quickly respond to changes in supply and demand. Long-term changes in terms of weeks or months are relatively easy to predict and offer sufficient time to adjust changes in supply with changes in demands. Short-term changes – such as heat waves, which require immediate adjustment in power, as needed for air conditioning – are more difficult to predict and adjust to. Many of the recent grid blackouts have emerged as a result of such short-term surges in demand. The various storage devices’ compatibilities are measured by their discharge times. These characteristics are shown in the figure below:

Electricity Storage Technologies Graph

Capacity, again, is a measure of the power of the devices.

The scales in both graphs are logarithmic scales (August 6, 2012) in which equal distance on the axes indicates factor of ten differences in value. (In other words, the differences are large)

The need for storage capacity recently reached the big news with Tesla Motors’ announcement of a plan to construct a Gigafactory for Li-ion batteries for its electric car fleet; a project with an estimated cost of $4 billion. Panasonic has now decided to join this effort, investing both money and equipment. The factory aims to start producing batteries in 2017.

Why did Tesla choose the Li-ion over the Lead-Acid battery? The first figure clearly shows that the Li-ion batteries are more expensive both per unit of power and per unit of energy as compared to lead-acid batteries, so other considerations must be at play. The Gigafactory is targeted toward supplying batteries for electric cars. This means weight must be another important factor. The table below shows the energy stored in the two batteries per unit of weight of the battery. This parameter is known as the energy density. The data in the table are based on those in the Wikipedia entry. The energy density of the two batteries is shown in comparison with that of gasoline. The energy density of Li-ion is four times higher than that of lead-acid batteries but is still about 75 times lower than that of gasoline. These numbers indicate the relative advantage of the Li-ion over the lead-acid battery but at the same time convey the enormous challenge facing manufacturers of electric cars as compared to those that make gasoline-driven vehicles.

Storage device

Specific Energy (MJ/kg)

Specific Energy (kwh/Lb)

Gasoline

46

5.86

Li-ion battery

0.62

0.08

Lead-Acid battery

0.17

0.02

A word about the units in the table: The two right columns present the same data in different sets of units: the right column corresponds to the units that are predominantly used in the US, while the central column is given in units widely accepted in the rest of the world. The conversion is as follows: 1MJ = 0.28kwh; 1kg = 2.2Lb. It is a great exercise to try this conversion – especially for American readers – because it helps open our windows of comprehension to more global information.

* I always welcome questions and comments about my blog, my book, and my work in general. Unfortunately, I have been deluged with spam – both in the comments section here, and in my email. In the interest of spending my time addressing actual messages (instead of sorting through junk), I ask that you please send any questions to one of the following addresses, with the title, “Comment about CCF blog.”

micha (no space) tom (at) brooklyn (dot) cuny (dot) edu

or info (at) lcgcommunications (dot) com. Thank you for your continued readership and your feedback.

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CCF Special Mini-post: Response to Twitter, Article by David MacKay

If you’re not following me already on social media, I hope that changes now (Facebook, twitter). I tweet about my new posts, and share some great articles that I come across. I also pay attention to messages from my followers. I recently got a tweet directed my way from Dadiva Netter – @sidnets, asking me to comment on a paper by David MacKay (Former Chief Scientific Advisor, DECC, and Regius Professor of Engineering at Cambridge, who is also on twitter) that was submitted to the Royal Society.

Since I’m still not completely used to condensing complex thoughts into 140 characters, I’m including my full response here, and linking to it through twitter:

Thank you Dadiva for directing my attention to this important article. It is a significant quantitative contribution to the requirements necessary for a global energy transition to decarbonized energy sources based on solar energy conversion in all its forms. It makes the key point that although globally there is plenty of energy coming in, locally there are imbalances that require separating energy production from consumption. The emphasis in the paper is on sovereign states (with Britain as a focal point), but in-state disparities – especially between dense populations of urban consumers and equally dense rural production areas – require extensive investments in storage and smart grids capable of covering a large area. In my downloaded copy, I started highlighting important paragraphs for later reference, and ended up yellowing the entire article. I will also use the article in my class on climate change.

I’d be delighted to address the article in more detail – either on my own or in response to you joining me as a guest blogger (how about it?).

I’d also love to invite David MacKay on to Climate Change Fork to talk about his article. Please let me know what you think at michatom (at) brooklyn (dot) cuny (dot) edu.

Thanks everyone, and have a great weekend!

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The Economics of Energy Storage

Two of the last three blogs (July 15 and July 29, 2014) discussed the role that energy storage plays in the transition to more sustainable energy sources. In my last blog, I tried to discuss the available technologies. This week, I will put the emphasis on the economics, while in the next one (assuming that nothing “urgent” interferes), I will focus on the considerations that take place in the selection process of which technologies to apply.

In order to discuss the economics of needed storage, let’s focus on a  recent IEA (International Energy Agency) report; it came up with a roadmap for the global storage technologies required in order to accommodate an energy transition aimed at limiting the global temperature rise to below 2oC. The main conclusions of this report are summarized below:

  • Energy storage technologies are valuable in most energy systems, with or without high levels of variable renewable generation. Today, some smaller-scale systems are cost competitive or nearly competitive in remote community and off-grid applications. Large-scale thermal storage technologies are competitive for meeting heating and cooling demand in many regions.
  • Individual storage technologies often have the ability to supply multiple energy and power services. The optimal role for energy storage varies depending on the current energy system landscape and future developments particular to each region.
  • To support electricity sector decarbonisation in the Energy Technology Perspectives (ETP) 2014 2DS, an estimated 310 GW of additional grid-connected electricity storage capacity would be needed in the United States, Europe, China and India. Significant thermal energy storage and off-grid electricity storage potential also exists. Additional data are required to provide a more comprehensive assessment and should be prioritized at the national level.
  • Market design is key to accelerating deployment. Current policy environments and market conditions often cloud the cost of energy services, creating significant price distortions and resulting in markets that are ill-equipped to compensate energy storage technologies for the suite of services that they can provide.
  • Public investment in energy storage research and development has led to significant cost reductions. However, additional efforts (e.g. targeted research and development investments and demonstration projects) are needed to further decrease energy storage costs and accelerate development.
  • Thermal energy storage systems appear well-positioned to reduce the amount of heat that is currently wasted in the energy system. This waste heat is an underutilized resource, in part because the quantity and quality of both heat resources and demand is not fully known.

Focusing on the United States, India, China and the European Union, the IEA calculates the necessary daily capacity for electricity storage and the corresponding investments that are vital to satisfying all of these countries’ energy storage needs in 2050. The data are presented for three different scenarios for capacity building:

  1. 2DS scenario – this is the baseline scenario where renewable energy technologies are increasing their share of worldwide electricity generation from about 20% in 2011 to about 65% in 2050, with variable renewals supplying 29% of the total electricity produced globally. This scenario corresponds to approximate requirement to limit the global temperature increase to 2oC.
  2. A “breakthrough” scenario that assumes aggressive reduction in the cost of storage
  3. “EV” scenario where demand response from “smart” charging of electrical vehicle fleet in the 2DS scenario provides additional flexibility to the system.

The two figures below, marked “figure 7” and “figure 9” (from the original report), show some of the most important aspects of the results.

Figure 7:  Electricity storage capacity for daily electricity storage  by region in 2011 and 2050 for ETP 2014 scenarios

IEA Electricity Storage Capacity for Daily Electricity Storage by Region MichaIEA Investment Needs for Energy Storage in Different ScenariosThese figures need some brain tutoring enforcements. The second figure is self-explanatory – we all understand how much $1 billion is, and all 4 regions need to spend around $150 billion (each) – based on the 2DS scenario – to satisfy their storage needs, and that constitutes big money. It is worth noting here that the same amount is about 50 times bigger for India than it is for the US and Europe as compared with present GDP.

The units in the first graph are a bit more interesting, so let us try to calculate their significance from first principles: I will focus again on India and the United States. The figure indicates that in 2011, the daily electricity storage in the United States was about 20GW (1 GW = 1 gigawatt = 1 billion watts), while in India that storage was very close to zero on this scale (I will take it to be 1 GW for this calculation). Again, India has much more work to do to get to the 2050 target based on this scenario. In both cases, based on the 2DS scenario, the need will increase to about 80 GW. How significant are these numbers and how can we relate to them based on first-principle calculations?

My data source for most of these kinds of calculations is the World Bank. According to the World Bank, the population of India in 2011 was about 1.22 billion (1.22×109 using Scientific Notation) while that of the United States was 322 million (3.22×108). The electric power consumption that year in the United States was 13,246 kwh/capita (1kwh = 1 kilowatt hour = 1000 watt hours) while that in India was 684 kwh/capita.

This is highly confusing and my editors will start climbing trees claiming that this is rocket science for the “average” reader and I should “simplify.” You are not an “average” reader, though, so let’s try to go through the complexities.

The most confusing thing here should not be the numbers but the units. The figure lists electricity storage in units of billion watts. We know that a watt is not a unit of energy but a unit of power (think of the rating of a light bulb – as 60 watt or a 100 watt). To convert power to energy we have to multiply the power rating by the time that we use it. So when we pay the electric bill we don’t pay for the power but for the energy that we use. When we leave a 100 watt light bulb on for 10 hours we use 100w x 10hrs = 1000 watt-hours = 1kwh of energy. So if we want to calculate the amount of energy in 1 GW of daily energy storage it will give us 1 billion watts x 24hrs = 24 gigawatt-hours of energy/day, the needed energy storage for the United States in 2011 is 20GW = 24×20 gigawatt-hours/day = 480 gigawatt-hours/day.

According to the World Bank, the average energy consumption in the United States in 2011 was 13,246 kwh/capita. We need to multiply this number by the US population in 2011 to get the total electricity consumption for that year. This results in 4.3×1013 kwh/year (try it!). We then divide this number by the number of days per year to get 11.8 billion kwh/day = 11,800 gigawatt-hours/day.

The needed energy storage for the United States in 2011 is 480/11,800 = 4% the average electrical energy consumption for that year.

A similar calculation of India’s data produces 684 kwh/capita x 1.22×109 people = electric energy consumed in 2011 = 834 billion kwh/year or 2.4 billion kwh/day = 2400 gigawatt-hours/day. The present storage requirement based on 1GW is 24 gigawatt-hour/day. So the Indian storage requirement amounts to only 1% of their daily use of electricity.

Based on the 2DS scenario the projected storage requirements in the US in 2050 will increase 2.5 fold from today’s figures, while those of India will be 50 times larger. These are enormous numbers that present both massive challenges and equally large business opportunities. People all over the world are beginning to realize that.

 

* I always welcome questions and comments about my blog, my book, and my work in general. Unfortunately, I have been deluged with spam – both in the comments section here, and in my email. In the interest of spending my time addressing actual messages (instead of sorting through junk), I ask that you please send any questions to one of the following addresses, with the title, “Comment about CCF blog.”

micha (no space) tom (at) brooklyn (dot) cuny (dot) edu

or info (at) lcgcommunications (dot) com. Thank you for your continued readership and your feedback.

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Storage – the Technologies

A quick note: this week’s post is a bit of a science challenge and requires some further investigation by the reader. Please click through to the links and email me if you have any questions.

The Energy Storage Association (ESA) lists the following electric storage technologies:

  • Solid State Batteries – a range of electrochemical storage solutions, including advanced chemistry batteries and capacitors (Electrochemical Capacitors, Lithium Ion (Li-Ion) Batteries, Nickel-Cadmium (Ni-Cd) and Sodium Sulfur (NAS) Batteries)
  • Flow Batteries – batteries where the energy is stored directly in the electrolyte solution for longer cycle life, and quick response times (redox Flow Batteries, Iron-Chromium (ICB Flow Batteries, Vanadium Redox (VRB) Flow Batteries and Zinc-Bromine (ZNBR) Flow Batteries)
  • Flywheels – mechanical devices that harness rotational energy to deliver instantaneous electricity
  • Compressed Air Energy Storage - utilizing compressed air to create a potent energy Reserve (Compress Air Energy Storage (AA-CAES), Advanced Adiabatic Compressed    Air Energy Storage (AA-CAES) and Isothermal CAES)
  • Thermal – capturing heat and cold to create energy on demand (Pumped Heat Electrical Storage (PHES), Hydrogen Energy Storage and Liquid Air Energy Storage (LAES) )
  • Pumped Hydro-Power – creating large-scale reservoirs of energy with water (Pumped Hydroelectric Storage, Sub-Surface Pumped Hydroelectric Storage, Surface Reservoir Pumped Hydroelectric Storage and Variable Speed Pumped Hydroelectric Storage)

The technical ESA’s website also presents details of each storage method. There are, however – to use a common college term – some “prerequisites” necessary before we can follow up on these details. That kind of targeted educational background is something that most of us do not have. Since describing it in terms that don’t require such prerequisites requires a lot of effort and takes great deal of time for both the reader and writer, I will skip most of the explanations here. Anyone who wants to learn more about these storage modes is welcome to try his/her hand on the appropriate Wikipedia sites (If you hadn’t noticed yet, I tend to like Wikipedia as a source for quick, well-written information). Instead, for the moment, I will focus on two important categories: Solid State Batteries and Pumped Hydro-Power.

Solid State Batteries:

On a hot summer weekend, my wife and I were invited to visit friends in suburban NYC. The friends live in a house with a swimming pool and they invited us to take advantage of it. The gathering was pleasant and intimate, with us the only guests. I was sort of swimming around alone in the pool with everybody else chatting outside. Suddenly, the hostess called to me, saying that they needed some technical advice. The discussion topic was the cost of upkeep of the pool. They all agreed that it is ridiculously expensive and they were trying to find a better solution. My hostess got a proposal to save on chlorination by using a common salt and she asked me how it works. It had been a long time since I had to deal with swimming pool maintenance so I had to explain, using basic chemistry, that the only way that I can think of that it would work is through the use of electricity in an electrolytic process. Therefore, in order to figure out if the new system is a money saver, we will have to figure out if what she saves on chlorination will not be balanced out by the combination of an extra-large electric bill and the prices of the electrolyzer and regulator (more than $2,000). She shook her head and said the only thing that she knows about such matters (she is a college educated teacher) are the + and in her car battery. Here is what Wikipedia says about the chlorination gadget:

Salt water chlorination is a process that uses dissolved salt (2,500–6,000 ppm) as a store for the chlorination system. The chlorine generator (also known as salt cell, salt generator, salt chlorinator) uses electrolysis in the presence of dissolved salt (NaCl) to produce hypochlorous acid (HCIO) and sodium hypochlorite (NaClO), which are the sanitizing agents already commonly used in swimming pools. As such, a saltwater pool is not actually chlorine-free; it simply utilizes a chlorine generator instead of direct addition of chlorine

Since I’m using her as a representative of general public knowledge, I guess we had better start with what she knows. Probably, the simplest battery that all of us know about is the Lead-Acid battery that are in use in most cars. I also found that this battery probably offers the simplest explanation how batteries in general work. The Lead-Acid is not even listed in the ESA list of batteries. If we look for a battery entry in Google and read the Wikipedia entry we find 20 different batteries (not the mere 4 shown on the ESA list). The working principle is similar to that of the Lead-Acid battery but the chemistry is different. Here is the simplest example that I could find of how the Lead-Acid battery works:

Lead-Acid BatteryFor reference, the compounds above are as follows: H2SO4 - Sulfuric Acid, PbO2 – Lead Oxide, PbSO4 – Lead Sulfate, H2O –Water, Pb – Lead.

In the charging process Lead (Pb) is deposited from the Lead Sulfate (PbSO4) onto the negative electrode and at the same time Lead Oxide (PbO2) is deposited on the positive electrode. In the discharge process the reverse reactions take place. We use excess electricity to charge the battery and use this electricity when we have access demand. For a more detailed walk-through of the chemical process, you can go here.

Hydro-Power Storage:

Here the science is considerably simpler. A schematic is shown in the picture below: hydroelectric power station 2For storage we use electrical power to pump water to a reservoir uphill and when we need the extra power we use the stored water to run the power station below like a regular hydroelectric generation.

How do we convert the water flow into electricity? The process is similar to that of generating electricity from power plants run on fossil fuels such as coal and natural gas. In both cases we turn a propeller like a turbine that moves a magnet relative to conducting wires. This phenomenon produces electric power in a way that was originally demonstrated by the English scientist Michael Faraday (1791- 1867). Water is the most widely used storage device for power generating facilities but other materials can be used for the same purpose. Perhaps one of the most interesting variants is based on a loaded train that is driven uphill powered by access electricity and downhill to generate electricity when needed. The stored energy can be adjusted by changing the weight loaded. It can operate in places where hydroelectric storage is not practical.

The discussion with my friend about the cost-effectiveness of salt water chlorination is ongoing, but I will let you know when we reach a conclusion.

In future blogs I will focus on some of the economic considerations when choosing what storage devices to use and how to incorporate them into the grid structure.

* I always welcome questions and comments about my blog, my book, and my work in general. Unfortunately, I have been deluged with spam – both in the comments section here, and in my email. In the interest of spending my time addressing actual messages (instead of sorting through junk), I ask that you please send any questions to one of the following addresses, with the title, “Comment about CCF blog.”

micha (no space) tom (at) brooklyn (dot) cuny (dot) edu

or info (at) lcgcommunications (dot) com. Thank you for your continued readership and your feedback.

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Sustainable China?

In the last blog I started to discuss the role that energy storage plays in the transition to more sustainable energy sources. While I had originally planned to focus this blog on the various energy storage technologies, I will instead postpone that subject for a later blog. Instead, as often happens (at least to me) current events diverted my attention to a different topic.

This time, the trigger for the change was a short piece in the online magazine Renewable Energy World.com. I am a subscriber and a regular reader of this magazine. Elisa Wood, a writer from the organization was my guest blogger here on May 6, 2014 and I contributed to her May 31, 2013 blog regarding adaptation to climate change. A few days ago, the following piece by Alexandra Ho from Bloomberg showed up in their publication:

China Requires Electric Vehicles to Make Up 30 Percent of State Purchases

Alexandra Ho, Bloomberg

July 14, 2014

SHANGHAI — China is mandating that electric cars make up at least 30 percent of government vehicle purchases by 2016, the latest measure to fight pollution and cut energy use after exempting the autos from a purchase tax.

Central government ministries and agencies will take the lead on purchases of new-energy vehicles, a term that China uses to refer to electric vehicles, plug-in hybrids and fuel-cell autos, according to a statement on the central government’s website yesterday. The ratio will be raised beyond 2016, when local provinces are required to meet the target.

China is stepping up support for electric vehicles as demand lags behind its target because of consumer concerns over price, reliability and convenience. The government has identified EVs as a strategic industry to help it gain global leadership, reduce energy dependence and cut smog that often reaches hazardous levels in Beijing and other cities.

“This is a laudable aspiration,” said Yang Song, a Hong Kong-based analyst at Barclays Plc, who estimates that government purchases made up less than 10 percent of total new vehicle sales in China. “Government purchases are not growing as fast as private consumption. So just to rely on the government purchase would be a challenge.”

Last week, China announced the waiver of a 10 percent purchase tax for new-energy vehicles, excluding them from the levy beginning Sept. 1 to the end of 2017, the central government said in a statement posted on its website on July 9.

BYD Co., the electric automaker partially owned by Warren Buffett’s Berkshire Hathaway Inc., climbed 3.6 percent to HK$48.90 as of 11:47 a.m. in Hong Kong trading. The benchmark Hang Seng Index gained 0.4 percent.

Electric Vehicles

The measures announced yesterday by the National Government Offices Administration also direct agencies to give preference to all-electric vehicles in purchases, while cold-weather jurisdictions may consider plug-in hybrids. Electric sedans should cost no more than 180,000 yuan ($29,000) after subsidies.

Government organizations and public institutions will be required to add parking spaces reserved for new-energy vehicles and ensure the ratio of charging facilities to the vehicles is equal, according to the plan.

Local officials will be held responsible if the targets aren’t met, according to the statement.

Copyright 2014 Bloomberg

This caught my eye because for years there has been a tendency to view electric cars as an important and visible component of energy transformation to more sustainable energy sources. They are not.

Electricity is a secondary energy source. Its sustainability depends on the primary energy sources. If we produce the electricity from solar, wind, hydroelectric or biofuels – it is sustainable. If we produce it by burning coal it is not.

Here are the primary energy sources from which China is producing its electricity.

total energy consumptionAccording to recent report from EDGAR (Emission Database for Global Atmospheric Research) China is now the largest global emitter of carbon dioxide, at 9.9 billion tons/ year, as compared to the United States, which comes in second at 5.2 billion tons per year. On a per-person basis, the United States is still on top, with emissions of 16.4 tons of carbon dioxide per person, compared to China’s 7.1 tons per person. Both far exceed the global average of 4.9 tons per person.

While there is nothing inherently wrong with a transition toward electric cars, they cannot be heralded as a solution to extremely high emissions. As we can see from the graph above, 69% of China’s energy production comes from coal; from that, we can infer that 69% of the power for an electric car comes, likewise, from coal. The promised move to electric vehicles will not change this situation until China actually changes the energy sources from which it gets its electricity.

* On a separate note, I always welcome questions and comments about my blog, my book, and my work in general. Unfortunately, I have been deluged with spam – both in the comments section here, and in my email. In the interest of spending my time addressing actual messages (instead of sorting through junk), I ask that you please send any questions to one of the following addresses, with the title, “Comment about CCF blog.”

micha (no space) tom (at) brooklyn (dot) cuny (dot) edu

or info (at) lcgcommunications (dot) com. Thank you for your continued readership and your feedback.

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