Stern Review

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Go green, go vegan

Lord Stern says the meat industry damages the environment. Image source: VirtualTourist.com

Lord Stern says the meat industry damages the environment. Image source: VirtualTourist.com

Clearly irritated that his argument in an interview in the Times had been boiled down to a ‘go veggie to save the planet’ headline, Nicholas Stern has issued a clarifying statement:

I think that once people understand the great risks that climate change poses, they will naturally want to choose products and services that cause little or no emissions of greenhouse gases, which means ‘low-carbon consumption’. This will apply across the board, including electricity, heating, transport and food. A diet that relies heavily on meat production results in higher emissions than a typical vegetarian diet. Different individuals will make different choices. However, the debate about climate change should not be dumbed down to a single slogan, such as ‘give up meat to save the planet’.

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Professor Hans Joachim Schellnhuber CBE. Image source: Potsdam Institute for Climate Impact Research.

Professor Hans Joachim Schellnhuber CBE. Image source: Potsdam Institute for Climate Impact Research.

Hans Joachim Schellnhuber is the German government’s climate protection adviser and a distinguished physicist. He was interviewed by the German magazine Der Spiegel last week and gave a starkly simple view of how much CO2 the world can emit.

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Most governments in the developed world were elected on platforms that promised aggressive policies on greenhouse gas emissions. The reality has not matched the commitments made. The reasons for this are multitudinous and no one should ever underestimate the difficulties of weaning advanced societies off the use of cheap and convenient access to fossil fuels. But in addition to the standard reasons for slow progress we can see a large number of obstacles that spring from human psychology. In particular, some of the resistance to aggressive action on climate seems to spring from mental attitudes that may have helped us survive as a species in the past. Perhaps politicians intuitively recognise the existence of these barriers. So they continue to say that climate change is the most important problem facing humanity at the same time as adding new runways to the local airport or sanctioning the development of new coal-fired power stations.

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Ed Miliband, Minister for the Department of Energy and Climate Change. Photograph: David Levene/Guardian.

Ed Miliband, Minister for the Department of Energy and Climate Change. Photograph: David Levene/Guardian.

The government wants to emphasise the affordability of climate change mitigation. It produces low estimates of the cost of low-carbon technologies. In the recent 2009 budget documents, the government estimated a cost of 1% of GDP to meet the tough new 2020 targets. In his pronouncement on carbon capture at coal-fired power stations, energy and climate change secretary Ed Miliband later said that his proposals will add 2% to electricity bills.

Are these numbers reasonable? Professor Sir David King, the former chief scientific adviser, says no. In a BBC interview of 26 April, he indicates that he thinks that the cost of reducing the UK’s emissions is much higher than the government indicates but also that the financial implications of not dealing with the climate change threat are far higher than even Nick Stern suggests.

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Why is humanity finding it difficult to take action on climate change?
Most governments in the developed world were elected on platforms that included promises to pursue aggressive policies on greenhouse gas emissions. Broadly speaking, the reality has not matched the promises made. The reasons for this are multitudinous and no one should ever underestimate the difficulties of weaning advanced societies off the use of cheap and convenient access to fossil fuels. But in addition to the standard reasons for slow progress we can see a large number of obstacles that spring from human psychology. In particular, some of the resistance to aggressive action on climate seems to spring from mental attitudes that may have helped us survive as a species in the past. Politicians may intuitively recognise the existence of these barriers. So they continue to say that climate change is the most important problem facing humanity at the same time as adding new runways to the local airport or sanctioning the development of new coal-fired power stations.

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The Climate Change Committee (CCC) wrote in its December report that the world could expect about a 2 degree rise in temperature by 2100 if global emissions fell by about 50% by mid-century. It said that the risk of more than a 4 degrees rise is less than 1% if the world achieved this reduction. Because the UK has per capita emissions much higher than the global average, the Committee recommended that the country should cut its emissions by about 80%. This would eventually leave the UK’s emissions per head as about the same as the rest of the world.

The CCC report is thorough, robust and clear. But is its recommendation sufficiently prudent? In four main respects, the Committee has chosen a more optimistic conclusion than I believe is warranted. The implication is that its emissions reductions targets are not severe enough.

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The easier of Adair Turner’s two main challenges is deciding how to save the entire UK banking system in his role as chairman of the FSA. As head of the Climate Change Committee, the more difficult job is persuading the government that it needs to take substantial action over greenhouse gases.

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Gordon BrownThe environmental community tends to think that Gordon Brown doesn’t understand the complexity and size of the climate challenge. His first speech on the subject gave more detail than expected and reassured some that the prime minister does recognise the severity of the challenge. He moved towards an 80% reduction in GHGs by 2050, but even under optimistic assumptions his plans will not result in emissions reductions on the scale required. All his proposals were pain-free. He does not yet believe that the electorate is ready to face the real challenges of emissions reduction.

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The rebound effect

Energy efficiency improvements often do not deliver reductions in energy use. For example, when a householder installs better insulation, the energy savings are sometimes much less than would have been predicted. Sometimes this is because the insulation was badly fitted, but it is often because the householder runs the heating at a higher temperature when the house is better insulated. This is called the ‘rebound’ effect: when it becomes cheaper or more effective to use energy, people use more of it.

The many studies into this effect have produced a wide variety of different estimates for the size of this effect. Most cluster between 10 and 30%. This means that energy efficiency improvements generally result in a large net benefit. But these studies only capture the direct effect on consumers and businesses. A study from the UK’s Energy Research Centre shows that the economy-wide impact may be much larger. For example, lower heating bills may mean that householders are rich enough to take more flights. At an even higher level of abstraction, better economy-wide energy efficiency (through, say, improvements in steel-making technologies) may encourage more rapid economic growth, which in turn raises energy use.

Some economists think that the economy-wide rebound from energy efficiency gains is very large – perhaps over 100%. A figure over 100% suggests that total energy consumption rises after energy efficiency improvements. The tentatively stated view of a new report by the UK Energy Research Centre is that the true number is somewhat lower than this and may be around 50%, although it could be a great deal higher.

Government projections for the impact of energy saving measures never take the rebound effect into account. Policy-makers trying to reduce global emissions need to adjust their thinking to reflect the much lower than expected efficacy of energy saving programmes.

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The Severn barrage

Nobody expects a Severn barrage to be built soon. But government opinion appears to be swinging in favour of the idea. The independent Sustainable Development Commission has just brought out a report that broadly supports a barrage. Though the environmental costs will be high, it says that mitigation measures will counterbalance some of the damage.

We now also have a better feel for the economics of the scheme or, more correctly, for both of the two main options for blocking the Severn. The bigger scheme blocks the estuary between Cardiff and Weston-super-Mare. It will cost about £15bn and deliver just under 5% of the UK’s electricity. The smaller – just downstream of the Severn bridges – will cost a tenth as much, or £1.5bn, but will provide a sixth as much power as the bigger project.

£15bn to build a barrage that decarbonises less than 5% of the UK’s electricity supply is a high price to pay. Scaled up to the whole of the electricity business, this is about 20% of one year’s GNP to replace coal and gas power stations. Even over twenty years, this cost is similar to Stern’s estimate of the cost of reducing the UK’s emissions for the economy as a whole. The smaller barrier delivers much less electricity, but at a capital cost per kWh of little more than half its larger cousin.

The Sustainable Development Commission acknowledges that private financiers are unlikely to put up the cash for the bigger scheme. The report doesn’t really discuss the viability of the smaller barrage but it is much more financially attractive. In terms of total capital cost and expected yearly output, the upstream barrage is very similar to the huge wind farm development called the London Array. The Array will be constructed with private capital. I believe that if the current renewable electricity support scheme remains in place a barrage across the upper Severn can be built with risk capital.

The Sustainable Development Commission thinks that the bigger scheme should be built with public funds. I am not convinced by this. The offshore wind resources around the UK are orders of magnitude greater than the useful energy of Severn tides. If the larger Severn barrage has construction costs of nearly twice the typical figures for offshore wind, wouldn’t it be better simply to speed up the licensing of wind farms?

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