The climate debate is an interesting one. If you ask any scientist, are you sure that human activity is causing global warming? any scientist should say no. Because you cannot be sure, so as far as climate change skeptics, I believe in the scientific method and one should have a healthy skepticism of things in general. First thing from a scientific standpoint is that you always look at things probabilistically, not definitively. A lot of times, if someone is a skeptic in the scientific community, what they're really saying is that they're not sure that it's 100% certain that this is the case.
But that's not the point, the point is to look at it from the other side. There's a certain amount of carbon that is circulating through the environment. It's going into the air and then getting absorbed by plants and animals, and then going back into the air, and this carbon is just circulating on the surface. This is fine and it's been doing that for hundreds of millions of years. The thing that's changed is that we've added something to the mix. This is what I would call ‘the turd in the punch bowl.’ We have these low-cost stored hydrocarbons in the ground that have accumulated over hundreds of millions of years, perhaps over 1 billion years in the case of methane. In a lot of cases since the Pre-Cambrian era when the most sophisticated thing was a sponge. We are taking trillions of tons of CO2, that was buried deep in the Earth's crust for hundreds of millions of years, and is not part of the carbon cycle, and are putting it into the carbon cycle of the atmosphere. As the carbon levels rise in the atmosphere some of that CO2 migrates into the oceans, gets absorbed into the water, and creates carbonic acid and causes acidification. A lot of the shellfish in particular are super sensitive to changes in pH level.
We've added all this extra carbon to the carbon cycle, and the net result is that the carbon in the oceans' atmosphere is growing over time. It's much more than can be absorbed by the ecosystem. It's really quite simple, we are putting so much carbon into the atmosphere that we are fundamentally changing the chemical make up of Earths atmosphere and of the oceans.
This is accompanied by a temperature increase as one would expect. People talk about 2 degrees or 3 degrees temperate increase. It’s important to appreciate just how sensitive the climate actually is to temperate. It's important to look at it in terms of absolute temperature, not in degrees Celsius relative to zero. We need to say, what is the temperature change relative to absolute zero? That's how the Universe thinks about temperature. That's how physics thinks about temperature. It's relative to absolute zero, for small changes result in huge effects. New York City under ice would be minus 5 degrees, New York City under water would be plus 5 degrees. Looked at as a percentage relative to absolute zero, it's only a plus/minus 2% change.
If you asked any scientist, what do you think the percentage chance is of this being catastrophic for some meaningful percentage of the Earth's population? is it greater than 1%, is it even 1%? or do you think we should put an arbitrary number of trillions of tons of CO2 into the atmosphere, and just keep doing it until something bad happens, they will probably say no too.
The carbon parts per million (ppm) has really been bouncing around the 300 ppm level for around 10 million years. Then the last few hundred years, it went into a vertical climb, and we have passed the 400 ppm. If you look at the famous Keeling curve that shows the growth in CO2 concentration in the atmosphere and every year it ratchets up - it gets higher and higher and if we do nothing it's headed to levels that we don't even see in the fossil record. Every year the CO2 ppm ratchets up, it's like a ratchet. It’s kind of like being on the rack, you know the stretching rack, the torture device. When you got on the rack at first it didn't feel that bad, you crank it a few notches, it stretches out your back, not too bad. Then you keep ratching it further and further, and it becomes excruciating. That’s where we are headed.
The way I look at the CO2 thing is that we are running an experiment, which is to see what the CO2 capacity of the oceans and atmosphere is before Earth gets cooked. I don't think that is a wise experiment. Let’s say that experiment is 99% likely to show that CO2 is no problem, but 1% likely to show that it's going to cook the planet. I don't think we want to take that 1% chance, it's just not smart. Now, that experiment may turn out to be fine, but it may also turn out to be really bad.
We are playing Russian roulette, and as each year goes by we're loading more rounds in the chamber. It's not wise, we should not play Russian roulette with our atmosphere, we only got one. If we don't take corrective action the possibility of a catastrophe will increase over time, and eventually there is certainty of a catastrophic outcome.
There is no question that at a certain level it will destroy the Earth, or destroy large portions of the Earth, the question is just, what is that level? and how soon do we stop pumping vast quantities of CO2 into the atmosphere? The question is just when and how many billions of tons of CO2 are in the atmosphere versus in the ground. This is the essence of the problem. This is a very unusual and a very, very extreme threat.
What makes it super insane is that we're going to run out of oil anyway. Given that oil, and even coal are a finite resource. It doesn't seem to make sense that we would run that experiment when we have to get off them anyway, because they are simply finite. It's not like there's some infinite oil supply, we're going to run out of it. At some point, we have to get to something that is sustainable. We have to have sustainable production and consumption of energy because, tautologically, if it is unsustainable you will run out of it.
Let’s say hypothetically, CO2 was good for the environment, and let's say hypothetically, the United States possessed all the oil in the world. You’d still have to get off oil, because it's a finite resource, and as you start to run out of it, the scarcity would drive the cost up and cause economic collapse. Independent of environmental impact we must find some alternative, or there will be economic collapse, and civilization would sort of crumble or revert.
We know that we ultimately have to get off of oil no matter what, we know that that is an inescapable outcome, because the alternative would be to mine all the carbon-based fuels from the ground, burn them, and then either move to a sustainable economy or the entire economy collapses because it doesn't have any energy. It's simply a question of when and not if. Then why would you run this crazy massive experiment of changing the chemical composition of the atmosphere and oceans by adding in enormous amounts of CO2 that have been buried since the Pre-Cambrian era? That's crazy, that is the dumbest experiment in history by far. I mean can you think of a dumber experiment? I honestly cannot. What good can possibly come of it? It's the stupidest thing I can possibly imagine, and don't think that logic is a function of somebody's party or affiliation or ideology, it's just a function of rationality.
It kind of feels like those delayed gratification experiments. Where kids get this like, you can have two cupcakes if you wait five minutes, or you can have one cupcake if you eat it now. That’s a good predictor of the kids future success. We are just like the kid that scores the cupcake in like three seconds. That's kind of the sort of silly situation that we find ourselves in. We should terminate this experiment as soon as possible. I think we collectively should do something about this and not try to win the Darwin award, for us and a lot of other creatures too.
There's a lot of things that are happening in the world today that are important and that deserve our attention. There are many important issues in the world. This is not the only important issue, but I think it's always important to say what is important in the long term. This is I think, the thing that will have the biggest negative effect on humanity if we do not address it.
The sensitivity of climate is extremely, extremely high. We've amplified this sensitivity by building our cities right on the coastline, and most people live very close to the ocean. Based on the projections that we're seeing right now, and these are like I'd say arguably best case projections, we're going to see significant rises in temperature and sea level. The net result is if we don't take action, we could see anywhere from 5% to 10%, maybe more of the land mass absorbed by water. Which maybe doesn't sound like that much, but about a third of humanity lives right on the coastline or in low lying countries. The way that humanity has kind of grown up around the world, is that we've put so many of our cities and settlements and towns right along the coastline. The world is quite delicate in this sort of chemical balance. There are some countries, of course, that are very low lying and would be completely under water in a climate crisis. We've essentially designed civilization to be super sensitive to climate change. We'd be talking about maybe 2 billion people being displaced, their homes being destroyed, and their countries being gone.
I think we should take action. Depending upon what action we take will drive the carbon number to either extreme or moderate levels. I think it's pretty much a given that the 2-degree increase will occur. The question is whether it's going to be much more than that, not if there will be a 2-degree increase.
I think, if we take action reasonably soon, we can avoid a calamitous outcome. If we only take action towards the end of the century, then it's going to be extremely bad.
I don't think people quite appreciate the momentum of climate change, you know. Even if we immediately stop all carbon production, the momentum will still carry forward and increase the temperature, raise water levels, and make storms more powerful and all those things. I think that will eventually sink in, but the problem is that it's on such an epic scale, with so much inertia, that the point at which it becomes obvious that it's a severe problem - it's like, imagine there's a supertanker coming towards you, it suddenly appears out of the fog like, oh wait, supertanker coming towards me, you can't turn the supertanker real fast. It's going to keep going in that direction, that's got a lot of inertia. The amount of time that it'll take to switch the global industrial base to sustainable generation and consumption of energy is going to be measured in decades. I think the scientific fact of the matter is we are unavoidably headed towards some level of harm.
The sooner we can take action the less harm will result.
The worst case is more displacement and destruction than all the wars in history combined, so why not do it sooner? I'm not saying it has to be a radical or an immediate change, or that people need to inject a great deal of misery into their lives to avoid CO2, but we should lean in that direction. We should lean in the direction of supporting technologies that are sustainable, and lean slightly against technologies that are unsustainable. That just seems pretty sensible. Even if environment isn't a factor.
What are the actions that if we don't take them today will result in quite a terrible future, and what’s the good outcome? The good outcome is, we minimize the carbon production, we transition to sustainable transportation and energy production, which is going to be like solar, wind, geothermal, hydro, and some nuclear, I think we have to accept that nuclear is a good option, in certain places. I actually think that the most likely outcome is a reasonably good one, where there's damage but we recover. I actually think that will occur. I'm quite optimistic about the future, I'm not suggesting complacency in the least, but I'm optimistic about the future.
The reason that transition is delayed or is happening slowly is because there is a hidden subsidy on all carbon-producing activity. What we have here is a tragedy of the commons. It is really a common problem in economics, you have the same thing in fishing, where, because there is no cost to fishing stocks, people just over-fish and you have disaster that ensues.
In economics 101 when you have an unpriced externality the market system will not function correctly. In the market system prices are just information, so when the price of information is false, then wrong behavior will occur in a market economy. In a healthy market, if you have say $10 of benefit and $4 of harm to society, the profit would be $6. This makes obvious sense, this is where the incentives are aligned with a good future. If you have the incentives aligned, then the forcing function towards a good future, towards a sustainable energy future will be powerful. This is not the case today. In an unhealthy market, you have your $10 of benefit, but the $4 isn't taxed. You have an untaxed negative externality. This is basically Economics 101. You have basically unreasonable profit, and a forcing function to do carbon-emitting activity, because this cost to society is not being paid. The net result is 35 Gigatons of carbon per year into the atmosphere. This is analogues to not paying for garbage collection. It's not as though we should say have a garbage-free society. It's very difficult to have a garbage-free society, but it's just important that people pay for the garbage collection. Basically every economist would agree with this, that whenever you have an unpriced externality where the use of the product causes long term damage to the environment, that is a true cost. If that cost is not incorporated in the price of petroleum, then effectively it's a subsidy.
The thing that people I think don't totally appreciate is that every fossil fuel car is quite heavily subsidized. I think most people don't realize that. It's heavily subsidized both of the direct subsidies that the oil and gas companies get which are enormous, and the negative effect on the environment, and not paying for all of the auxiliary effect of wars and all of these other things at the gas pumps. It may not seem like that but it is. It's really a figure that is so large that it's difficult to even comprehend. If you look at the IMF study we have untaxed negative externality, which is effectively a hidden carbon subsidy of enormous size, $5.3 trillion a year according to the IMF. The IMF which doesn't have any axe to grind one way or another. They don't make electric cars, and they're not part of the oil and gas industry, it is just a scientific analysis.
The solution obviously is to remove the subsidy. I think the best thing to do to achieve that would be a carbon tax. The market system will work extremely well if it has the right information to work. If we just apply a tax to carbon, and then dial that up according to whatever achieves the target maximum carbon proportion in the atmosphere that's, I think, the right way to go.
We could say what is the maximum parts per million of CO2 that are acceptable. You have to say what is the maximum ppm that we will consider acceptable for Earth, is it 500, is it 600, 800? That is our bank account of carbon that is acceptable in the atmosphere. Then you have to say what is the acid level in the ocean that is acceptable. If we can just agree on what those numbers are, then we can price that boundary accordingly. I think we will find that it's a very high price, and currently we are selling it for zero.
When you have an unpriced externality and the normal market mechanisms do not work, then it's a government role to intervene in a way that's sensible. The best way to intervene is to assign a proper price to whatever the common good is that's being consumed. Generally taxing CO2 is not a popular thing. Therefore what the government tries to do it is to subsidize low carbon activities like Photovoltaics and electric vehicles and that kind of thing. Since we set a price of zero, which is wrong, then we try to make up for it with all these incentives and subsidies, but they are not as good as simply pricing the CO2. That would be the right thing to do. In the absence of pricing CO2, incentives and subsidies are the next best thing. That's the long and short of it. If CO2 is correctly priced, and of course the correct price is a debatable proposition, then no subsidies are needed. No incentives are needed for electric vehicles, no incentives are needed for battery storage or clean energy production if CO2 is correctly priced.
I'm generally a fan of minimal government interference in the economy. Very often when there is a government intervention, the government intervention increases the error in the price. As a general rule government intervention is best to be avoided, but there are cases where government intervention decreases the error. Since we know that the price of CO2 should not be zero, any action that increases the price of CO2 will reduce the error in the market system. It will result in better behavior, so that's the thing that should occur here. It seems logical that you should tax things that are most likely to be bad, that's why we tax cigarettes and alcohol, because those are probably bad for you. Certainly cigarettes are, so, you want to err on the side of taxing things that are probably bad and not tax things that are good.
We should make it probably a revenue neutral carbon tax. This would be a case of increasing taxes on carbon, but then reducing taxes in other places. Maybe there would be a reduction in sales tax or VAT, and an increase in carbon tax so that only those using high levels of carbon would pay an increased tax. Moreover, in order to give industry time to react, this could be a phased-in approach, so that maybe it takes five years before the carbon taxes are very high. That means that only companies that don't take action today will suffer in five years.
There needs to be a clear message from government in this regard, because the fundamental problem is the rules today incent people to create carbon, and this is madness. Whatever you incent will happen. The government should be like the referee, but not like the player, and there shouldn't be too many referees.
The fundamental issue that we are facing is that even though the fast majority of scientists, like 97 or 98%, basically everyone who doesn't have a vested interest or isn't crazy, thinks this is a real serious issue. Countries really need to act unilaterally. I think it's really important that people demonstrate to governments around the world that they care about climate change. We can't have this thing where such and such country isn't doing it, so I'm not doing it. Set a good example and hopefully, over time, other countries will fall in line, or get ostracized. I think that's probably the smart move, then there's no need for subsidies and special incentives which are really a backwards way of trying to deal with the lack of a carbon tax. I think the best possible scenario would be that something like that is instituted. We're still going to have a significant increase of carbon in the atmosphere, temperatures are still going to rise, sea levels will rise. The Dutch can manage, you know, with a lot of dyke companies, there's a lot of options in the dyke business.
It's all about how you set the economics of carbon producing actions versus non-carbon producing actions. This is being fought quite hard by the carbon producers. You've got the oil and gas companies which have ungodly amounts of money, and you can't expect them to just roll over and die, they don't do that. Actually, what they prefer to do is spend enormous amounts of money lobbying, and running bogus ad campaigns, and that kind of thing, to preserve their situation. I mean the fossil fuel industry is the biggest industry in the world. They have more money and more influence then any other sector.
I am sort of disinclined to vilify the oil and gas industry, if we didn't have them we would have economic collapse. If there was a button I can press that would stop all hydrocarbon usage today, I would not press it. It would cause human civilization to come to a halt. It would be ridiculous. It would be irresponsible to press that button. People would be starving to death, so it is very necessary in the short-term. It's hard to ask the CEO of an oil company to act against their best interests, that's the thing. In fact if they do they might get fired by their shareholders. The right thing to do is to change the rules of the game to incent the right behavior. I have a hard time condemning the oil and gas companies, because the current system incents them to do bad behavior. That's why I am a big believer of a carbon tax I think that is the way to go. We need to stop effectively subsidizing burning fossil fuels.
The problem right now is that the rules of the game fundamentally favor bad behavior. Where very powerful forces are trying to keep it that way. The economics so strongly favor the oil and gas industry. In fact to give you sort of a sense of it, if you took the value of all the solar companies in the US, it's about a third of the profit that Exxon makes in a year. The investment tax credit for solar in about a year dropped to 10%, however the investment tax credit for stripper oil wells is 20%. This would be like if you have vegetables and cigarettes, and you’re incenting the purchase of cigarettes. That doesn't make any sense.
The problem is that in monetary terms the oil and gas companies have basically infinite money. Basically if money can do anything it will slow down action, that's what it's doing. That's why we're seeing very little effect thus far. Where I have an issue with the oil and gas guys is when they sometimes engage in nefarious tactics, or things that are somewhat insidious, like funding academic studies that people can then point to as though they have some credibility. Some prominent Professor somewhere, but that person has actually been paid by the oil industry to write that study. It's that kind of thing that obviously should be condemned in the strongest. It's a lot like tobacco companies in the old days. We saw something similar to this with tobacco, in fact tobacco is sort of smoking for individuals, and this is kinda smoking for the planet.
They're using tactics that are very similar to what the cigarette industry or the tobacco industry used for many years. It's the same playbook. They would take the approach of even though the overwhelming scientific consensus was that smoking cigarettes was bad for you, they would find a few scientists that would disagree, and then they would say, "Look, scientists disagree." That's essentially how they would try to trick the public into thinking that smoking is not that bad. I mean, they used to run these ads with doctors, or like a guy pretending he's a doctor, essentially implying that smoking is good for you, and like, having pregnant mothers on ads smoking. I would recommend reading the book "Merchants of doubt" that actually spells it out in detail. How some of these things are going on where the oil and gas industry all they need to do is to create doubt. In fact they have employed a lot of individuals and firms that were employed by the tobacco industry, literally the same people. Some scientists of JPL and elsewhere sort of explored what's going on here. That's what they've done, and they actually found that the oil and gas industry is actually using the same lobbyists, like literally the same people as the tobacco industry, like by name, not even the firm. I'm surprised that some of these people are still around because they're quite old, some of those guys are still going. I would encourage people to read "Merchants of doubt", because they are literally using the same playbook as the tobacco industry did. Oddly enough the one movie I was involved in making was ‘Thank you for smoking’ which I recommend watching, it's a fun movie. It's based on Buckley's book, it's really gets to the truth of the matter of how all this happens.
What they do essentially is exploit doubt. Even when you got a situation where virtually everyone, every scientists on Earth agrees that global warming is real, that adding billions of tons of carbon to the atmosphere and oceans is a bad idea. You have a few percent who dissent, and the way that is presented to the public is not that 97 or 98% of scientists think that what we are doing is crazy, but simply that scientists disagree. Scientists disagree about everything. You will not find 100% of scientists agree about anything. This is a very disingenuous argument, so the more that there can be sort of a popular uprising against that the better. If people of the world say something must be done, and demand something from their politicians, demand that they do the right thing. I think that is the only thing that can overcome the monetary power of lobbying.
I think in terms of how can you help, just sort of spread the message. I know that you think that global warming is real, but the crazy thing is a lot of people out there don't. It blows my mind. There is a lot of miss information out there, and as the threat of electric vehicles becomes more and more significant to the oil industry, obviously they step up the propaganda campaign, and that is to be expected. It’s really important to counter the propaganda, and there is a nonstop propaganda campaign from the fossil fuel industry. They are just defending themselves it's kind of what you would expect, but it's nonstop and they have like 1000 times more money than we do. This revolution is going to come from the people, so fight the propaganda.
I think when you look back on these days in the future, we want to be able to say that we did the actions that were right. The actions that were important. Because if we go 20, 30 or 40 years into the future, what do you say to your kids or your grandkids? Let's say your kids and your grandkids say: “did nobody tell you?” It's like: “No everyone was telling us” then “OK so why didn't you do anything?” What's the answer?
I think it's very important that we do something. I think we're really going to regret the amount of carbon we're putting in the oceans and the atmosphere. I think we're really going to regret it.