Climate Fail Twofer: The “Rising Costs Of Climate Change As Oil Prices Drop” and “Deniers Are a Danger to Our Security”

Guest commentary by David Middleton

In my daily dose of Real Clear Energy, I ran across a “twofer” of climate stupidity, both of which appear to be based on NCA4 and featured the exact same photo from Hurricane Harvey…

Both articles feature the exact same photo.  Forbes credits it to Fox News, The Washington Post credits in to David J. Phillip/AP.  This photo was used as the featured image for this post even though it has nothing to do with climate change or this post… However, it also had nothing to do with either article that featured it.  So, at least I’m being consistent (/SARC).

The first article from Forbes is written by Ariel Cohen:

I cover energy, security, Europe, Russia/Eurasia & the Middle East

I am a Senior Fellow at the Atlantic Council and the Founding Principal of International Market Analysis, a Washington, D.C.-based global risk advisory boutique. I advise law firms and corporations, and once helped to get a famous Russian oligarch out of Putin’s jail. I am also the founder of Center for Energy, Natural Resources, and Geopolitics (CENRG). For 22 years, I was the Heritage Foundation’s leading Russia/Eurasia and international energy expert. My consultancy focuses on political risk, national security, and energy policy, especially in Russia/Europe/Eurasia, and the Middle East. The firm’s interventions span international security, economics, law, politics, terrorism, and crime and corruption. In addition to consulting for both the public and private sectors, I testify regularly before the U.S. Congress, and appear on Bloomberg, CNN, FOX, BBC, Al Jazeera, and other TV channels. In my free time, I enjoy skiing, sailing, classical music, and my two cats.

Mr. Cohen’s article starts out well.  He notes that the Global War Against the Weather might actually be more economically destructive than the weather will be, but then, the wheels came off…

Dec 18, 2018

The World Faces Rising Costs Of Climate Change As Oil Prices Drop

In the last few weeks, two important climate reports were released – the Fourth National Climate Assessment (NCA4) and the UN Emissions Gap Report 2018. Both studies highlight the risks of rising greenhouse gas emission (GHG) concentrations in the Earth’s atmosphere, and the potential consequences should these trends continue. The threats posed by a warming world are not just dangerous for the climate-dependent sectors of our economy (crops, livestock, and global fisheries), but bad for global security as well. The Trump Administration’s Pentagon calls climate change a ‘threat multiplier’ because it aggravates pre-existing societal stress factors. Instances of state collapse, refugee flows, and conflicts over basic resources, including food and water attributable to climate change, have already been studied.

But battling climate change will not be easy – or cheap. Since the era of a steam engine, the global economy has been inextricably linked to fossil fuels – from the oil that powers the world’s vehicles to the coal and natural gas that illuminates our cities – which means that a transition to cleaner alternatives will need to be managed with care. Too sudden a shift — and we may risk introducing economic, social and geopolitical shocks that could dwarf the worst outcomes of climate change.

[…]

What the Reports Say

The NCA4 is important because it puts in perspective two different greenhouse gas concentration scenarios – Representative Concentration pathways RCP 8.5 and RCP 4.5.

The NCA4 predicts that under the RCP8.5 or ‘business as usual scenario’…

[…]

But the dangerous RCP 8.5 is looking much more likely than RCP 4.5. Low oil prices – as we have experienced since their crash in November – hurt the renewables transition by making fossil fuels more competitive. Without a large-scale substitute for oil in the world’s transportation fleets, the lower-case scenario may be out of reach.

Even an RCP 4.5 scenario (2.4 degrees C or 4.5 degrees F temperature rise by 2090) could cost the U.S. economy 4% of GDP.

[…]

Forbes

• The Global War Against the Weather will almost certainly introduce “economic, social and geopolitical shocks that could dwarf the worst outcomes of climate.”  It is already doing this.
• RCP8.5 is not “business as usual.”
• RCP8.5 in not “looking much more likely than RCP 4.5.”
• This is one of the most idiotic sentences ever written: “Low oil prices – as we have experienced since their crash in November – hurt the renewables transition by making fossil fuels more competitive.”  The crash in the price of oil since November is no more relevant than the rise since 2016 or crash in 2015 or any other boom or bust.  At no point have fossil fuels needed price fluctuations to be “more competitive” with renewables… Because renewables are totally noncompetitive.  Nor has there been any transition to renewables or any other energy transitions in human history.
• “The lower-case scenario” is not only not “out of reach,” it’s above the current trajectory of reliable temperature trends.
• “RCP 4.5 scenario… could cost the U.S. economy 4% of GDP”… Wrong.

NCA4, Volume 1 (2017) featured the following image.  I overlaid HadCRUT4 and UAH 6.0 on then image:

On its current trajectory, UAH 6.0 will exit the 21st Century slightly above RCP2.6.  This is consistent with a low climate sensitivity (TCR ~ 1.5-2.0 K).

Mr. Cohen features this image from NCA4 Volume 2:

This is based on Hsiang et al., 2017, which idiotically and literally referred to RCP8.5 as “business-as-usual emissions.”

Based on a simple projection of UAH 6.0 to the end of this century, we get about 1.9 °C of total warming by the end of this century. According to Hsiang et al., 2017, that equates to about a 1% reduction in US GDP from 2080-2099, relative to what it would be without any additional warming…

However, this does not reflect a reduction in GDP.  It reflects a reduction in GDP growth.

The Climate Won’t Crash the Economy

A worst-case scenario projects annual GDP growth will be slower by 0.05 percentage point.

By Steven Koonin
Nov. 26, 2018

Headlines warned of economic doom after the U.S. government released its fourth National Climate Assessment last week. Yet a close reading of the report shows that the overall economic impact of human-caused climate change is expected to be quite small.

[…]

The final figure of the final chapter shows that an increase in global average temperatures of 9 degrees Fahrenheit (beyond the 1.4-degree rise already recorded since 1880) would directly reduce the U.S. gross domestic product in 2090 by 4%, plus or minus 2%—that is, the GDP would be about 4% less than it would have been absent human influences on the climate. That “worst-worst case” estimate assumes the largest plausible temperature rise and only known modes of adaptation.

To place a 4% reduction in context, conservatively assume that real annual GDP growth will average 2% in the coming decades (it has averaged 3.2% since 1935 and is currently 3%). That would result in a U.S. economy roughly four times as large in 2090 as today. A 4% climate impact would reduce that multiple to 3.8—a correction much smaller than the uncertainty of any projection over seven decades.

[…]

If we take the new report’s estimates at face value, human-induced climate change isn’t an existential threat to the overall U.S. economy through the end of this century—or even a significant one.

[…]

Steven Koonin, The Wall Street Journal

How much would you spend today to possibly obtain an additional 0.05% of annual GDP growth over the next 80 years?  Dean Wormer has the answer:

Mr. Cohen’s article started out OK before going full stupid.  The other article, from The Washington Post, by Jennifer Rubin, does this right from the start (warning, lots of foul language):

Opinions

Climate-change deniers are a danger to our security

By Jennifer Rubin
Opinion writer
December 18

Imagine during the Cold War that one political party, in the face of overwhelming evidence that the Soviet Union was engaged in espionage against the United States, had a nuclear arsenal pointed at the United States, kept Eastern Europe under its thumb and imprisoned dissenters, refused to consider the Soviet Union a danger — of any sort — to the United States or other Western democracies. And they would offer no credible evidence to the contrary, but rather assert that it was all a hoax. Besides, they’d insist (with no evidence) that it was too expensive to address the challenge posed by the Soviet Union, a danger which they claimed didn’t exist (So how expensive could it be? Don’t ask!). Actually, you don’t have to imagine this scenario. Many on the left have made arguments along these lines, and many on the right have responded by saying they were fuzzy-headed, in denial or captive of interest groups.

That is essentially what is going on, only with the parties flipped, in the climate-change debate. Climate-change denial has become as necessary to one’s right-wing identity as aversion to immigration, opposition to most abortions and a disbelief that sexual harassment and assault are widespread. Just as rejecting geopolitical reality became a requirement of inclusion in far-left circles, climate-change denial is a must for those who want to remain in the Trump fold.

On what basis do they deny climate change?  President Trump says he knows a lot about science, so believe him instead of all the scientists who work for the federal government [AKA NCA4].

[…]

The Washington Post

I take back my comment about describing one of  Mr. Cohen’s remarks as “one of the most idiotic sentences ever written”… This clearly is THE most idiotic sentence ever written:

Besides, they’d insist (with no evidence) that it was too expensive to address the challenge posed by the Soviet Union, a danger which they claimed didn’t exist (So how expensive could it be? Don’t ask!)

Mr. Cohen appears to have at least read NCA4 and made some effort to familiarize himself with the science and economics.  Ms. Rubin just went full retard.  The closest she came to a rational statement was, “President Trump says he knows a lot about science, so believe him instead of all the scientists who work for the federal government.”  Presumably, she was referring to NCA4… But she never cites anything to support her “opinion.”

The recent IPCC SR1.5 clearly stated that it was too expensive to address the challenge posed by the Soviet Union Gorebal Warming. Anyone with half-a-brain would consider a $240/gal tax on gasoline for a $122 trillion slush fund too expensive.  But, Ms. Cohen wasn’t done…

On what basis do they deny climate change?

Who denies climate change?  The point most skeptics focus on is the fact that climate has always changed and always will change.  At this point, Ms. Rubin went even fuller retard…

At some point, maybe in 2020, Democratic candidates are going to start running on the very sensible conclusion that climate-change deniers are a menace to Americans’ economic well-being, comfort and security.

This is what “a menace to Americans’ economic well-being, comfort and security” looks like:

Based on data available for this special report, the price of carbon varies substantially across models and scenarios, and their value increase with mitigation efforts (see Figure 2.26) (high confidence). For instance, undiscounted values under a Higher-2˚C pathway range from 10–200 USD2010 tCO2-eq^–1 in 2030, 45–960 USD2010 tCO2-eq^–1 in 2050, 120–1000 USD2010 tCO2-eq^–1 in 2070 and 160–2125 USD2010 tCO2-eq^–1 in 2100. On the contrary, estimates for a Below-1.5˚C pathway range from 135–5500 USD2010 tCO2-eq^–1 in 2030, 245– 13000 USD2010 tCO2-eq^–1 in 2050, 420–17500 USD2010 tCO2-eq^–1 in 2070 and 690–27000 USD2010 tCO2-eq^–1 in 2100.

SR15 Chapter 2 Page 2-79

The IPCC presented fairly broad cost ranges for the 1.5˚C and 2˚C pathways… So broad, they are almost meaningless. However, whenever a government agency says a program will cost between $690 and $27,000 per unit, it’s a good bet that it will cost at least $27,000. The IPCC being an intergovernmental agency cannot be expected to be better at economics than a single government agency. Here is a table of the full ranges for both pathways:

Is this really a tax?

Some commentators have said that this isn’t a “tax.” It’s just the price of carbon emissions as estimated by the IPCC. Whether or not it takes the form of a direct tax, it’s a cost that the IPCC says needs to be extracted from the private sector in order to fund the Global War on Weather.

Putting the IPCC price of carbon into context

Since it’s difficult to relate $/ton of CO₂, let’s look at it relative to common fuels used for transportation and electricity generation.

Gasoline

The folks at Resources for the Future were kind (or naive) enough to put together a handy carbon tax calculator to demonstrate the effects on various fuels. While it only goes up to $50/ton, it’s a good starting point for the math.

While numbers can vary depending on grades of gasoline, on average, the combustion of 1 gallon of gasoline yields 8.89 kg of CO₂. How does a gallon of gasoline, which weighs less than 3 kg yield nearly 9 kg of CO₂?

Molecular weight:

• O = 16
• C = 12

Chemical equation for combustion of octane:

• 2[C₈H₁₈] + 25[O₂] → 16[CO₂] + 18[H₂O]

The C comes from gasoline, the O₂ comes from the air.

Now, let’s translate a carbon tax into a gasoline tax:

This morning, I paid $2.70/gal at a Houston Texaco station. This price already includes $0.184/gal in Federal and $0.20/gal in Texas State taxes. That’s already a 17% tax at current prices.

This is how the IPCC carbon tax looks as a % of $2.70/gal.

It’s fairly obvious that the carbon pricing for the 1.5˚C pathway and the high-end of the 2˚C pathway are ridiculous non-starters as it relates to gasoline prices.

However, when it comes to electricity generation, it’s even worse.

Natural Gas

First, some US natural gas nomenclature:

SCF – Standard Cubic Foot is one cubic foot of gas at standard temperature and pressure (60 degrees F and sea level). Since both temperature and air pressure affect the energy content of a cubic foot of natural gas, the SCF is a way of standardizing. One SCF = 1020 BTUs.

Nat-G

While the Btu content of natural gas is variable, one thousand cubic feet (Mcf) is generally equivalent to one million Btu (mmBtu).

In terms of British thermal units (Btu):

Natural gas is the number one fuel for electricity generation in the US (31.7%), having edged out coal a few years ago. It’s also used for heating and cooking in many US homes. This is what the IPCC carbon tax would look like in $/Mcf of natural gas.

The average residential price for natural gas in the US in 2017 was $10.91/Mcf (about 3X the wellhead price). This is what the IPCC carbon tax looks like as a % of $10.91/Mcf:

Coal

Coal is the second most prevalent fuel for electricity generation in the US (30.1%). Coal comes in a lot of “flavors”: Anthracite, bituminous, sub-bituminous and lignite… and sometimes coke. For simplicity and due to its dominance in US coal production, I limited my analysis to Powder River Basin sub-bituminous coal. The low-end of the IPCC carbon tax for a 2˚C pathway would immediately more than double the price of Powder River Basin coal:

The average price for Powder River Basin coal in September 2017 was $12.10/short ton. This is how the IPCC carbon tax looks as a percentage of that price:

While claims of the “death of coal” have all proven premature, the IPCC carbon pricing scheme would almost immediately kill the world’s second most prevalent energy source, with no viable replacement apart from nuclear power and/or natural gas – which aren’t viable in many places.