Get Real on Climate Change and NO IMPACT Fossil Fuel Use

When contemplating the management of the transition to no impact from fossil fuel, one must begin with an accurate map of reality. In listening to the recent debate that has flared up as a product of recent election dynamics in British Columbia, one realises that the map of reality being relied on in many cases is grossly inaccurate.

CLICK HERE FOR CAP AND TRADE V CARBON TAX

(Carbon Tax fails to deter fossil fuel use - the premise it is presented under)

Reality one - we have to transition over a period of 40 to 50 years and it takes money to find other solutions. Reality two - there is insufficient fungibility in energy products to permit demand to be met by none fossil fuels. Reality three - whether Canada produces oil or not, world demand for oil remains the same and world consumption remains the same.

As a young person, I used to worry a lot about the issue of fossil fuel use. There were very dire predictions about the year 2000, the predictions were made, 2000 came and they simply never transpired; so from my perspective, the “scientists” have a credibility gap. It is important to note that the perception of a credibility gap and the absence of concern are different; I believe attention to the issue is required – I just have heard the rhetoric before. So remain calm and let's think this through, people need to tone down the rhetoric.

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The climate change solution lies in a multitude of approaches from conservation, to mitigation, to new energy sources AND no impact on fossil fuel use. The transition time needs to be contemplated in terms of decades - 40 to 50 years. It will take strong leadership and clear vision to get there. The reality is we will be calling on all solutions, including mitigation, because, the inertia associated with fossil fuel use is so strong. To fail to weigh this reality fully is folly, folly in finding a solution, folly in caring for the earth and folly in damaging our economy and by extension our ability to drive change.

What is concerning to me is the degree of isolation there is in the contemplation of the issue, there is an inclination to ignore reality.  The fossil fuel nihilists scream for the end of fossil fuels and offer no viable alternative. Please see below, this is where we are, this is the reality check – transition to alternatives is a 40 to 50-year process. There is a demand for fossil fuel, it will be filled, Canada can supply it and extract the wealth necessary to facilitate transition OR we can give the money to Nigeria, Iran, Saudi Arabia, Venezuela … it is more than stupid to curtail our industry, it is irresponsible in the extreme.

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There is also an inclination within the environmental community to “reduce” the use of the natural environment. This inclination tends to shrink more than the impact on the earth, it tends also to reduce the expectation of possibility – a culture of limitation has evolved: in the 1950s we were going faster, farther, higher – in 2015 we are seeking to reduce movement. It is important to note, however, that the West has this inclination while many others are just forging ahead absent an aft glance. We can build pipelines and transport oil safely - and we have too for all the reasons stated above.

WE NEED TO GET OUR OIL TO MARKET 

The effort people spend fighting the Oil Industry should be directed to developing technology and the safe use of fossil fuel. People tend to forget how good of a fuel fossil fuel is and using is in no way the problem, emissions are. We could, as a transition strategy, devote efforts to the safe use of fossil fuel more aggressively. A far better strategy is to dedicate substantive resources to new technologies rather than fighting Canada's oil industry. 

Finally, I believe in a market-based economy, I believe in that the efficiency of business can be directed in a manner that harmonises human activity with the earth. Many of the people I listen to speak on the issue have a blind spot when it comes to economics, worse they have a prejudice against economic thinking. The very best way to understand people and their interface with the earth is to look at the capsulized view of human activity financial data provides.

Take a look at the two graphs below AND TELL ME WHY THE GOVERNMENT THINKS CARBON TAX WORKS.

More Thinking on the Subject

Environmentalism Reconsidered - First Thoughts

Environmentalism Reconsidered - Scarcity Doctrine
Environmentalism Reconsidered - Agriculture & Scale
Environmentalism Reconsidered - Narrative & Origin
Environmentalism Reconsidered Lessons From Canadian Cod
Environmentalism Reconsidered - Connecting Carbon to the Economy
Canadian Oil V World Oil
Environmentalism Redefined - Road to Prosperity
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MY PROFESSIONAL WEBSITE

The Problem with Carbon Tax
Oil Sands Moratorium - wrong wrong wrong

Carbon Tax V Cap & Trade

If you’re bent on pricing carbon, think about this.

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In designing public policy the first objective should be “do no harm”, the second objective should be enhance human existence. In managing Carbon and the negative externalities that flow from fossil fuel use there is opportunity to; maintain a healthy economy, facilitate the transition to other fuels, develop the safe use of fossil fuels and to seed new or other industry.

We want to create a circumstance where people can readily respond to opportunities that flow from carbon credits. By way of example, an Oilsands company exceeds its carbon cap, posts a number of tons on a trading platform, then a business person elsewhere accesses the dollar value in that tonnage to plant an appropriate number of trees OR, a homeowner converts to solar or super insulates their home and accesses the value in that tonnage to offset the cost. The challenge in many of the conservation measures related to reducing fossil fuel use is that the economics fail to justify action - the time it takes to recoup capital costs associated with conversion to other energy sources results in the accumulated benefit of the “improvement” being unwarranted – when judged from an opportunity cost perspective and or on a partial budget perspective. So any policy that assists in enhancing the economic benefit in conversion is a wise choice. Cap & Trade provides opportunity for these sorts of “GDP neutral exchanges” to take place, that is to say, that Cap & Trade done properly can result in little or no net reduction in economic activity.

The assertion that Cap & Trade unduly burdens the industrial sector is errant, the system can be designed to cap consumer use of fossil fuels as well. There can be carbon caps on personal transportation associated with vehicle classification, certain vehicles would exceed the cap and incur carbon cost, that cost could be offset by some other conservation action by the vehicle owner or another actor OR by directing carbon credits to an electric car user for example.

In the age of the internet, trading platforms are readily accessible to all people and easy to use, so the process of posting excess use of carbon and people accessing the value associated with it is simple to do.    

The problem with Carbon Taxes is that they are implemented with a critical misconception – that, as in British Columbia’s case, a 2% Carbon Tax will deter fossil fuel use. When attempting to deter use of fossil fuel by increasing price, a large percentage - like 20% - will deter use, but only to a point because very soon demand for fossil fuel “hardens” or becomes “inelastic”; there is really a very small amount of discretionary fossil fuel consumption in society as a whole. We know this is true because, there is a hundred years of price sensitivity data that shows it to be true. British Petroleum has done extensive price sensitivity analysis in England, drawing on data from the energy crisis era. In a country that at the time had food costs at nearly 40% of disposable income, gas prices doubled and demand for gas degraded just slightly, but in the main held steady. Carbon Tax is a very weak deterrent to consumption and to be used as a deterrent to consumption would require economy slaying percentages to work.

$30 / tonne may translate to more or less than 2% at the point of consumption - the concept holds true.

If Carbon Tax is being implemented as a means to manage the negative externalities that flow from fossil fuel use, the Carbon Tax is a means to garner funds, in the same way that we tax liquor to manage negative externalities flowing to society from its use, THEN carbon tax may have some merit. If the Carbon Tax is a means to finance transition from a Fossil Fuel regime to another energy regime, then it may have some merit - BUT only if the funds are earmarked and directed to transition AND the tax is NOT revenue neutral. 

The important point here is that Carbon Tax is just another way to get money, linking the funds collected for carbon mitigation activities to the degree of fuel use really has no rational basis as a claim, given that the smaller increments in price have very little affect on consumption. There is no basis to assert for example, that the 2% Carbon Tax in British Columbia has decreased fossil fuel use, any declines in fossil fuel use can be attributed to the long-running trend starting in approximately 1980, where GNP and fossil fuel decoupled, with fossil fuel use relative to GDP falling. This is due to the expansion of non-industrial components in the economy. To support this point I have provided two graphs below, barrels per day oil consumption and the historical price of oil in current dollars - you'll see there is little or no correlation between oil price and oil consumption. 

   

More Thinking on the Subject
CLICK LINKS BELOW

Oilsands Moratorium Wrong Wrong & Wrong
Cop21 REALITY CHECK

Environmentalism Reconsidered - First Thoughts

Environmentalism Reconsidered - Scarcity Doctrine
Environmentalism Reconsidered - Agriculture & Scale
Environmentalism Reconsidered - Narrative & Origin
Environmentalism Reconsidered Lessons From Canadian Cod
Environmentalism Reconsidered - Connecting Carbon to the Economy
Canadian Oil V World Oil
Environmentalism Redefined - Road to Prosperity
Environment Reconsidered - A Positive Strategy

MY PROFESSIONAL WEBSITE

COP21 - REALITY CHECK

It is a good thing that so much attention is going toward managing humanities’ entire interface with mother earth. It has been a long time concern of mine that we will destroy the very source of our existence. As a young person I used to worry a lot about the issue. There were very dire predictions about the year 2000, the predictions were made, 2000 came and they simply never transpired; so from my perspective the “scientists” have a credibility gap. It is important to note that the perception of a credibility gap and the absence of concern are different; I believe attention to the issue is required – I just have heard the rhetoric before.

MY PROFESSIONAL WEBSITE

What is concerning to me is the degree of isolation there is in the contemplation of the issue, there is an inclination to ignore reality.  The fossil fuel nihilists scream for the end of fossil fuels and offer no viable alternative. Please see below, this is where we are, this is the reality check – transition to alternatives is a 30 to 50 year process. There is a demand for fossil fuel, it will be filled, Canada can supply it and extract the wealth necessary to facilitate transition OR we can give the money to Nigeria, Iran, Saudi Arabia, Venezuela … it is more than stupid to curtail our industry, it is irresponsible in the extreme.

MY PROFESSIONAL WEBSITE

There is also an inclination with in the environmental community to “reduce” the use of the natural environment. This inclination tends to shrink more than impact on the earth, it tends also to reduce the expectation of possibility – a culture of limitation has evolved: in the 1950s we were going faster, farther, higher – in 2015 we are seeking to reduce movement. It is important to note however, that the west has this inclination while many are just forging ahead absent an aft glance.

The effort people spend fighting the Oil Industry should be directed to developing technology and the safe use of fossil fuel. People tend to forget how good of a fuel fossil fuel is and using is in no way the problem, emissions are. We could, as a transition strategy, devote efforts to the safe use of fossil fuel more aggressively.

The earth has had larger swings in temperature in the past than we are experiencing now, quite recently in fact, so while we must seek to reduce our impact, we need to develop adaption strategies as well. There will come a time where we need to cool or warm the earth for one reason or another; we need the technologies to do it and an international venue to manage it.  

Finally, I believe in a market based economy, I believe in that the efficiency of business can be directed in a manner that harmonizes human activity with the earth. Many of the people I listen to speak on the issue have a blind spot when it comes to economics, worse they have a prejudice against economic thinking. The very best way to understand people and their interface with the earth is to look at the capsulized view of human activity financial data provides.  

More Thinking on the Subject

Environmentalism Reconsidered - First Thoughts

Environmentalism Reconsidered - Scarcity Doctrine
Environmentalism Reconsidered - Agriculture & Scale
Environmentalism Reconsidered - Narrative & Origin
Environmentalism Reconsidered Lessons From Canadian Cod
Environmentalism Reconsidered - Connecting Carbon to the Economy
Canadian Oil V World Oil
Environmentalism Redefined - Road to Prosperity
Environment Reconsidered - A Positive Strategy

MY PROFESSIONAL WEBSITE

The Problem with Carbon Tax
Oil Sands Moratorium - wrong wrong wrong