‘I think we’re going to find, with climate change and everything else – things like global warming and goodness knows what else and the cost of fuel for a start – that things are going to become very complicated.’
– Prince Charles
John Tyndall had a problem. A dazzling lecturer at London’s Royal Institution in its Victorian glory days, the extravagantly sideburned Irish scientist was a skilled experimenter who was famous for his public demonstrations of scientific principles using the latest technical equipment. (Tyndall had studied under Robert Bunsen, the inventor of the eponymous burner.) In 1859 his new experiment involved a vacuum pump, a long brass tube plugged with rock salt at either end, and a sensitive thermometer called a thermomultiplicateur.
Tyndall’s aim was to solve a puzzle posed by the French scientist Joseph Fourier three decades earlier. Fourier had calculated how much energy reached Earth from the sun, and how much was radiated into space by the Earth. The hotter the Earth, the more radiation would be given off, and Fourier had expected that Earth’s radiation would balance the heat absorbed from the sun at a temperature of about 15°C (60°F). Fourier was in for a shock, because according to his careful calculations, the actual energy balance implied that the average temperature of the planet should be minus 15°C (5°F). In short, the planet should be a giant snowball.
Tyndall reckoned that the answer to this puzzle was that the Earth’s atmosphere must be trapping heat like a greenhouse, and he decided to measure the effect. First he pumped air out of his brass tube and pointed his thermomultiplicateur through it, discovering, as he expected, that a vacuum absorbed no radiated heat. Then he added a mix of oxygen and nitrogen, the two gases that together make up over 99 per cent of the planet’s atmosphere. And there his problem began – because oxygen and nitrogen do not absorb much radiated heat either. The atmosphere didn’t seem to function as a greenhouse after all. So what was going on?
One of Tyndall’s obsessions was the purity of air. (Another of his experiments included purifying air by coating the inside of a container with sticky glycerine. After a few days, impurities in the air had stuck to the glycerine, and the circulating air was now so pure that food would not decay inside the container, even after months. He also devised a way of measuring impurities in air by observing the way a bright light scattered as it passed through.) In this case, however, it was the very purity of Tyndall’s air that was the problem, because Earth’s atmosphere contains traces of other gases than oxygen and nitrogen. It is about 0.4 per cent water vapour and 0.04 per cent carbon dioxide, along with argon and some other trace gases. Tyndall guessed that these impurities, insignificant as they seemed, might be making the difference. He added a tiny amount of water vapour, methane and carbon dioxide into his tube, and suddenly the radiated heat was absorbed.
Tyndall was surprised because the effect was so large; despite the minute presence of water vapour and carbon dioxide, the tube was absorbing many times more radiated heat. He wrote, ‘comparing a single atom of oxygen or nitrogen with a single atom of aqueous vapour, we may infer that the action of the latter is 16,000 times that of the former. This was a very astonishing result, and it naturally excited opposition.’
John Tyndall had discovered the greenhouse effect.
A century and a half later, the effect is not in serious doubt. What is up for dispute is how much we should care and what we should do. The first part of that question, as we saw in the last chapter, is ‘fundamentally unidentified’ or ‘FUQed’ – it simply can’t be resolved by another lab experiment like Tyndall’s. There are many complications: clouds may form in a warmer atmosphere, reflecting more heat; but white ice will melt, reflecting less; but when Arctic tundra melts and rots, it can release methane, a powerful greenhouse gas. Because of these feedback loops, some of which should dampen the effect while others are likely to increase it, the likely outcomes are uncertain. Some disastrous outcomes are plausible.
We know that the pre-industrial concentration of carbon dioxide was 280 parts per million (0.028 per cent); it’s now around 390 ppm, and international negotiators are paying lip service to the idea of keeping the concentration below 450 ppm. But we don’t know what level spells disaster. Some climate scientists reckon 450 ppm is far too high. There are a small minority who are far more relaxed: Richard Lindzen, a contrarian meteorologist at MIT, reckons that atmospheric concentrations of carbon dioxide could safely rise past 10,000 ppm. The large uncertainty is an argument for action rather than inaction: it’s the very uncertainty that makes catastrophe possible.
This chapter asks a different question: What is to be done? Our journey will involve an apparent paradox: the problem of tackling climate change is far more complicated than we tend to think, and failing to appreciate that complexity is precisely what holds us back from pushing ahead with a relatively straightforward solution.
This seeming paradox deceives many climate-change activists. A couple of years ago, after briefly addressing a convocation of environmental policy gurus, I was buttonholed by a climate-change activist who was almost speechless with rage. How could I say that dealing with climate change was complicated? ‘It couldn’t be simpler!’ he declared, and he started reeling off statistics – about the population of the planet, its ‘carrying capacity’, ice melting at the north pole – that proved he had both mastered his subject matter and missed the point. He was determined to convince me that climate change was very important. He had confused the importance of the problem with the simplicity of the solution.
In much the same way, a great deal of the discussion on climate change confuses targets with policies. Climate-change negotiators discuss whether countries should commit to reducing emissions of greenhouse gases such as methane and carbon dioxide by 10 or 15 or 20 per cent. Activists demand much bigger cuts, and many scientists think they are right. Yet debating whether the targets should be 15 per cent or 50 per cent or 80 per cent makes the problem sound like one of sheer willpower, and sheer willpower is not nearly enough. We must also figure out how these targets are to be met. Even with modest reductions in greenhouse gases, what is being prescribed is a wholesale reorganisation of the economy that surrounds us every day. There are almost 7 billion people on the planet, many of whom make many dozens of daily choices that affect greenhouse gas emissions. An appreciable reduction in greenhouse gases is going to require billions of individual decisions every day across the world, billions of human actions each hour, to change. ‘It couldn’t be simpler!’ Really?
Any answer is going to come either because individuals voluntarily change their behaviour, or because governments change the rules. Activists often point at big corporations, too. Certainly, some businesses have powerful lobbies that have successfully stymied government action on climate change. But that is still politics, rather than the everyday activity of business. There should be no confusion as to where the main responsibility for action lies. We drive cars not because ExxonMobil tell us to, but because we find cars convenient and vote out any politician who does too much to impinge on that convenience. Change will come either from the governments we elect, or through each of us voluntarily changing our ways.
Could individual voluntarism save the planet? It seems like a simple matter of willpower: we know what we must do and our challenge is to do it. This, at least, sounds like it couldn’t be simpler. We shall see.
It’s not every day that a film changes your life; especially not a film that is largely a PowerPoint presentation. But that is what has just happened to Geoff. Geoff is a straightforward kind of fellow: twenty-six, single, lives in London, works in an insurance office and until twelve hours ago, had very little interest in climate change. Last night, Geoff agreed to let a crush on his friend’s new flatmate, Jude, influence his judgement. Jude is a tree-hugging environmentalist – albeit a very cute one – and she showed Geoff Al Gore’s documentary An Inconvenient Truth. And this morning – having slept fitfully, amid dreams that he had set up home with Jude but the crumbling Antarctic ice sheet was about to submerge it in a terrifying wall of water – is the first day of the rest of his life: A life as a born-again environmentalist.
Geoff starts his day, as he always does, by filling the kettle for a coffee. But then he remembers that the kettle is an energy-guzzler, so he has a cold glass of milk instead. He saves more electricity by eating his usual two slices of bread untoasted. As he leaves the flat – pausing to unplug his mobile phone charger – he picks up his car keys, then thinks again and walks to the bus stop instead. By the time he hops off the bus by his office, the lack of morning coffee is getting to him so he pops into Starbucks for a cappuccino. At lunchtime, he quizzes the local deli owner about the provenance of ingredients and opts for a cheeseburger made with locally-reared beef. There’s a slow period in the afternoon so he surfs the internet, ordering himself a brochure about the Toyota Prius and arranging for an installer of rooftop windmills to come round and give him a quote. He’s tired at the end of the day and absent-mindedly leaves his office computer on standby before he heads for the bus stop.
Back at home late, after waiting ages for a bus, he drives to the supermarket – just a short trip, and he remembered to take his own plastic bags – where he buys a pack of energy-efficient light bulbs and a box of phosphate-free washing powder so that he’ll be able to put tomorrow’s work clothes through the washer-drier. He picks up some local organic lamb, local tomatoes and potatoes, and a bottle of wine (not shipped halfway round the world from Chile) for dinner. Having eaten, he saves more electricity by eschewing the dishwasher and doing the washing-up by hand. He decides to install his new energy-efficient bulbs, and then rethinks as that would involve throwing perfectly good light bulbs into the trash; so he puts them in a drawer, to replace the others as they fail. That night Geoff enjoys the sleep of the just, dreaming of Jude laughing happily, her hair tossed in the breeze of the open sunroof as she rides in the passenger seat of his new Prius.
You have no doubt guessed that Geoff’s eco-friendly day was not quite as successful as he would like to think.
Let’s start with the milk, which requires a critical piece of equipment to manufacture: a cow. Cows emit a lot of methane. (I put the matter delicately. If it is any consolation, most of the emission is through the cow’s mouth, rather than the alternative route.) And methane is a more potent greenhouse gas than carbon dioxide: in producing about 250 ml of milk, a cow belches 7.5 litres of methane, which weighs around 5 grams, equivalent to 100 grams of carbon dioxide.* Add all the other inputs to the milk – feed for the cows, transport, pasteurisation – and the 250 ml that Geoff drank produced around 300 grams of carbon dioxide. By not boiling his kettle, on the other hand, he saved only about 25 g of carbon dioxide. His first planet-saving decision, eschewing a coffee in favour of a glass of milk, increased the greenhouse gas emissions of his morning drink by a factor of twelve. Dairy products are so bad for the planet that Geoff would have done better to toast his bread but not butter it rather than buttering it but not toasting it.
As beef relies on the same methane-emitting equipment as dairy products, it should be no surprise that Geoff’s choice of a cheeseburger (2500 g of carbon dioxide for a quarter-pounder) was poor. The lamb chops he had for supper (say another 2500 g) were just as bad: sheep, too, produce methane. Geoff would have done better to choose pork or chicken, which emit about half the CO2 – and even better with fish, especially ones (such as herring, mackerel and whiting) that swim close to the surface and – unlike cod and tuna – remain plentiful. Best of all for the planet, Geoff could have had an entirely vegan supper, but it’s going to take more than Al Gore and a pretty face to persuade Geoff that this is a good idea.
Geoff was at pains to buy local, organic food. This helped – but only a little. Going organic trims 5 to 15 per cent off the cheeseburger and lamb chop figures. Buying local produce to reduce ‘food miles’, however, is often a counterproductive exercise. While it’s clearly true that freighting food around the world uses energy, the impact is less than you might think: most of it travels by ship; when it does travel by plane, it doesn’t get a big seat with ample legroom and free champagne (the term ‘food miles’ misleadingly echoes ‘air miles’, with its connotations of business-class indulgence rather than efficiently packed containers); and it was probably produced in a much more sensible climate.
Geoff’s choice of British lamb over New Zealand lamb might well have released more carbon dioxide – four times as much, if one team of academic researchers (admittedly, based in New Zealand) is to be believed. The figures are debatable but the basic insight is not: it takes more fossil fuel to produce lamb in the UK than in New Zealand, which has a longer grassy season and more hydroelectric power, and this should be weighed against emissions from transport. Geoff’s choice of British over Spanish tomatoes was certainly misguided: the carbon dioxide emitted by road-hauling them from Spain is utterly outweighed by the fact that Spain is sunny, whereas British tomatoes need heated greenhouses. As for avoiding Chilean wine, shipping wine halfway round the world adds only about 5 per cent to the greenhouse gas emissions involved in making it in the first place.
Geoff was pleased he took his own plastic bags to the supermarket, but a plastic bag is responsible for only about one thousandth the carbon emissions of the food you put in it. This didn’t come close to compensating for the indulgence he allowed himself of driving to the supermarket, which would have generated over 150 g of carbon dioxide per mile even if he’d already been driving his coveted new Prius. Even that number will be flattering because it assumes an uncongested journey, which is unlikely to be the case in London; and whatever some Prius fans may believe, it turns out that Priuses do have a corporeal form, and a Prius in congested traffic will cause more emissions indirectly by slowing other cars down than it will emit directly.
Still, let’s at least give Geoff some credit for taking the bus to work. But not too much credit. The typical London bus has only thirteen people on it, despite the city’s size and enthusiasm for public transport. Cars carry, on average, 1.6 people, and at that occupancy rate they actually emit less carbon dioxide, per passenger mile, than a bus at its typical occupancy. Some claim this is irrelevant because the bus was going anyway, and therefore Geoff’s contribution to greenhouse gases was close to zero. By the same logic Geoff could enjoy a guilt-free long-distance flight because the plane, too, is going anyway. The point is that Geoff’s purchase of the long-distance ticket would contribute to the airline’s decision about how many future flights it should run on this route. Unless bus routes are entirely insensitive to passenger demand – which is, one must admit, a possibility – then the same argument applies to catching the bus.
Geoff was, of course, planning to drive alone rather than with 0.6 other people, so by taking the bus he probably saved about 100 g of carbon dioxide per mile – say 300 g on a three-mile round trip commute. Unfortunately, he then wasted about the same amount by boiling his potatoes with the lid off.
Geoff did well to buy the energy-efficient light bulbs, but erred in waiting to install them; the old ones waste electricity so quickly that it’s more eco-friendly to chuck them out immediately. He shouldn’t have scorned the dishwasher, which is more carbon-efficient than the typical hand-wash – arguably, many times more efficient. The phosphate-free washing powder might be good news for the health of nearby lakes, but when it comes to climate change what matters is that Geoff should have used a low-temperature wash and left enough time to dry his clothes on a line instead of relying on the tumble dryer – thus using 600 g of carbon dioxide rather than 3300 g.
Jude is likely to be unimpressed by all of this. But perhaps Geoff’s windmill plan will save his as-yet-imaginary romance? It is unlikely. A small rooftop windmill in an urban environment generates an average of 8 watts, so Geoff would need twelve of them merely to run a standard 100W light bulb; one of these toy windmills will save Geoff just 120 g of carbon dioxide a day. He wasted five times as much as that by thoughtlessly leaving his desktop computer on standby in the office – which is easily done even by the most committed environmentalist, as I can see by looking across our shared office to the computer my wife forgot to turn off this morning. What about the mobile phone charger Geoff unplugged as he was leaving the house? That draws about half a watt, a hundredth of a computer on standby; even the windmill could cope with that. Unplugging it saves a magnificently puny 6 grams of carbon dioxide a day.
To summarise: despite Geoff’s good intentions and passing familiarity with the kind of stuff that causes greenhouse gas emissions, he made some decisions that saved much less carbon than he imagined and others that were actively counterproductive. It couldn’t be simpler? Not unless you devote your life to studying carbon emissions – and perhaps not even then. Euan Murray can vouch for that.
Euan Murray works for The Carbon Trust, an organisation set up by the UK government to help businesses reduce their carbon emissions. He’s responsible for ‘carbon footprinting’ – the study of how much carbon dioxide is released in the course of producing, transporting, consuming and disposing of a product. Murray spends his working life making the kind of calculations on which I relied to assess Geoff’s day, and he does it for corporate clients ranging from a bank (200 grams of carbon dioxide per bank account) to PepsiCo (75 grams of carbon dioxide for a packet of potato snacks). A red-haired, blue-eyed, young Scot, Murray is the modern face of climate-change action – dressed in a sharp shirt with cufflinks, he’s confident and straight-talking, at home with the technical details of carbon emissions without needing to fortify himself with jargon. He grew up on a sheep farm in southern Scotland, which gives him a suitably down-to-earth perspective on the messy task of calculating carbon footprints. ‘If I ask my old man “What’s the carbon footprint of a sheep?”, he looks at me as though I’m mad,’ he explains. ‘But he can tell me the stocking density, what he feeds the sheep, and he can answer those questions as part of running his business.’ Quite so: carbon footprinting is all about these kinds of specifics.
I chose to ask Euan Murray about Geoff’s moment of weakness in buying a fortifying cappuccino before stepping into the office. (Readers of my first book, The Undercover Economist, might have noticed a return to a favourite theme.) A cappuccino is easily as complex a product as Thomas Thwaites’s toaster: not only does it rely on the espresso machine – an impressive piece of equipment – but it also requires a cow, coffee beans, a cardboard cup, a plastic lid, and so on. Evaluating the carbon footprint of a cappuccino requires an estimate of the carbon footprint of all these different parts of the whole. You can see why I wanted expert help.
But Murray was only able to assist me up to a point. Carbon footprinting is a time-consuming business, and even taking a very broad view of what constitutes a product, there are many thousands of candidates for the footprinting treatment. (Recall Eric Beinhocker’s estimate that modern economies offer around 10 billion distinct products. Starbucks alone claims to offer 87,000 different beverages.) The Carbon Trust hasn’t been commissioned to calculate the footprint of a cappuccino just yet, so Murray falls back on educated guesswork.
‘Transportation is going to be small. Emissions from that are effectively zero, because you can fit a lot of sugar cubes and coffee beans on a boat.’ He starts to doodle as he works through the possibilities. ‘And sugar and coffee don’t require massive inputs of energy or other materials.’ After a few minutes blocking out the main possible greenhouse gas emissions from producing a cappuccino, Murray offers a conclusion that will add to Geoff’s dairy-related woes. ‘My guess is that it’s the milk that makes up the lion’s share of the carbon footprint.’
Murray’s benchmark is a bar of Cadbury’s dairy milk chocolate, a product for which the Carbon Trust has done a full footprint. The milk is only a third of the mass of the chocolate bar, but even after reckoning the cost of transporting and processing cocoa beans and sugar, melting the chocolate into moulds in the factory, and transporting the final product, the milk is responsible for two-thirds of the carbon footprint of the chocolate. Milk is, of course, almost the sole ingredient of a cappuccino. If Euan were to answer my question as thoroughly as he does for his corporate clients, he would have to crunch through some precise numbers for a whole lot of inputs and even then he’d have some knotty philosophical problems to grapple with: do we give credit to Starbucks because Geoff got there by bus on the way to the office, rather than making a special journey by car? Probably not. But does the barista’s commute count? What about the coffee farmer’s commute to the fields? Do we figure a lower carbon footprint if the café is double-glazed? The humble cappuccino shows why ‘it couldn’t be simpler’ couldn’t be more wrong.
At least Geoff now knows about the milk, but should he be going for a double espresso? Would a black filter coffee be better than the horror of a soya latte? Even if Geoff devotes every waking minute to researching how best he can help the planet – even if he was permanently on the phone to Euan Murray – he’d still make mistakes. It’s inevitable: in assessing where his virtuous day went wrong, I had to choose among findings that even the experts disagree about. I have seen figures claiming that driving in typical commuter conditions – even a Prius – emits many times more than I have suggested because of congestion. Mike Berners-Lee, author of How Bad Are Bananas?, tells me that bananas are a low-carbon food. Geoff Beattie, author of Why Aren’t We Saving the Planet?, remarks that bananas are a highcarbon product. I have seen credible research suggesting that meat – if farmed in the right way – might not contribute nearly as much to climate change as it now does. One can think very hard about this subject and sit with a stack of research papers and still not reach a settled conclusion.
What is Geoff to do? When I sought advice from green friends, one opined that the best way to reduce the climate impact of a visit to Starbucks was to abstain altogether. That it not going to impress a caffeine-starved Geoff, and still less people who are less concerned about the planet than Geoff is, which is to say, most people. (A recent opinion poll asked people what was the main thing they, personally, were doing to combat climate change. Thirty-seven per cent said ‘nothing’, and most of the rest only mentioned light bulbs or recycling.) And while one can abstain from cappuccino it is impossible to abstain from consumption altogether, so the question of what to consume quickly resurfaces. The project of simply exhorting people to save the planet by changing their behaviour is inherently limited.
We can dream of a high-tech solution to help guide Geoff through the muddle – some sort of smart-phone application that would recognise any of the 10 billion or so products and services in his city and calculate how much carbon dioxide or methane was embodied in their very existence. Geoff could take a snapshot or scan a barcode and within moments receive a report on just how damaging the cookie, or the espresso, or the cheeseburger, would be.
Perhaps this will be possible one day. But imagine the processing job: the phone app would certainly help prevent some of Geoff’s sillier mistakes, but for many others the obstacles to getting the number right are formidable. If, as Euan Murray points out, the source of milk matters for the milk’s carbon footprint, Starbucks would need to post data online about its milk suppliers – not to mention mileage for its supply trucks, its electricity bills and suppliers, and much else besides. A superficial carbon calculator could be built into any phone, and would help. But an app that calculated the full carbon footprint of any product seems a fantasy.
Even if the colossal database that would be needed could be put together, the problem would be far from solved. Only truly committed environmentalists would take the trouble to scan everything. And only environmentalists would be motivated to pay close attention to the results. For most people – the 37 per cent who say they are doing ‘nothing’ about climate change, or the much larger proportion who are doing very little – the information that flashed up on the smart-phone screen would be easy and painless to ignore.
But perhaps there is a way to make this fantasy a reality, providing real-time information to anyone who pulled their wallet out to make a purchase – without any need for scanners or a central database of every product on the planet. How might that work?
Imagine that the governments of the world’s major fossil fuels producers agreed to the following approach: that each of them would levy a tax of about $50 per tonne of carbon contained in any fossil fuel mined or extracted in its territory – roughly $14 per tonne of carbon dioxide. This would be, roughly, an extra $5 per barrel of oil, and nearly $40 per tonne of coal.*
That decision might appear to have nothing to do with a carbon-calculating phone app, but in fact it has everything to do with it. The carbon tax would piggyback on the system of market prices, which acts as a vast analogue cloud computer, pulling and pushing resources to wherever they have the highest value. A $50 carbon tax would increase the price of gasoline by about 12 cents a gallon, creating a small incentive to drive less, and more efficiently, and to buy more efficient cars. It would increase the price of a kilowatt hour of electricity – by about a cent and a half if the energy came from coal, but only by three quarters of a cent if the energy came from natural gas. That would create a small incentive to use less electricity, to buy home insulation, and for power companies to build natural gas power stations instead of coal-fired power stations – or, indeed, to invest in nuclear capacity or renewable energy sources.
That would just be the start. As the relative price of energy from different sources began to change, and the average price of energy increased, any energy-intensive product would begin to reflect that. Spanish tomatoes would rise in price because of the energy cost of shipping them from Spain; but British tomatoes would rise in price even more because of the cost of heating the greenhouse.
This would not be because of any grand plan. It would just happen: a trucker who ignored the higher price of diesel in setting his shipping charges would simply go out of business; so would a tomato cultivator who tried to absorb the cost of heating a greenhouse, rather than raising his prices. That said, if a tomato farmer came to market with local tomatoes grown under glass without heating, she would find that the carbon tax had given her an edge over her energy-hungry rivals. Geoff, arriving at the supermarket intending to buy tomatoes, wouldn’t have to point his smart phone at any barcodes: he could just look at the price. The more carbon-intensive the tomato, the higher the price would creep. And the price would be something Geoff would want to consider, regardless of how he felt about climate change.
What the carbon tax would do, then, is recreate the fantasy carbon calculator app, and give it teeth. No central database would be needed. Every product in the world would change in price according to the carbon content of the energy that produced it, and that would give every decision maker, from the electricity company to Geoff himself, an incentive to reduce their carbon footprint using whatever tactics occurred to them.
Even though a carbon tax has been floating around as a proposal for many years, it’s an idea that has yet to make much political headway. There are a few countries with carbon taxes on small sections of the economy. The European Union has a cap-and-trade scheme, with similar effects to a carbon tax, but the scheme has had teething problems and omits large chunks of the economy. India has a tax on coal, but it is small. No large country has introduced a substantial carbon price across the entire economy, and international negotiations continue to struggle.
So let’s step back from the carbon tax idea for a moment, and look instead at what governments seem to have embraced as the alternative: regulations designed to reduce carbon dioxide emissions from the top down.
The ‘Merton Rule’ was devised in 2003 by Adrian Hewitt, a local planning officer in Merton, southwest London. The rule, which Hewitt created with a couple of colleagues and persuaded the borough council to pass, was that any development beyond a small scale would have to include the capacity to generate 10 per cent of that building’s energy requirements, or the developers would be denied permission to build. The rule sounded sensible and quickly caught on, with over a hundred other local councils following suit within a few years. In London, the mayor at the time, Ken Livingstone, introduced ‘Merton Plus’, which raised the bar to 20 per cent. The national government then introduced the rule more widely. Adrian Hewitt became a celebrity in the small world of local council planning, and Merton council started scooping awards for its environmental leadership.
It is easy to see why the rule became popular. It is a simple and intuitive way to encourage something that most people agree is desirable – the growth of the renewable energy industry. It encourages developers to install highly visible and cool-looking new technology such as solar panels, rather than boring stuff such as insulation. And the costs are invisible. The rule costs the government nothing (one council introduced the rule after agreeing that the financial implications were ‘zero’ – presumably they had in mind the financial implications for the council, rather than for anyone else). It also costs the developers little, as in a competitive market they will pass on most of the costs to the final buyer of the building. And the final buyer of the building doesn’t really notice the rule’s extra costs in the middle of the much larger costs of owning or renting a building.
But all is not well with the Merton Rule. The drawback that should have been most obvious is that just because renewable energy capacity is installed doesn’t mean it will be used. A simple renewable energy option is often a dual-fuel boiler that can burn both natural gas and biomass such as wood pellets – it can be installed without any great upheaval in a developer’s designs, thus satisfying the letter of the Merton Rule. Of course, once such a boiler is installed, it will be simpler and cheaper to burn natural gas and not bother about the wood at all. Installed renewable capacity: 10 per cent. Renewable energy produced: zero. Perversely, the ‘Merton Plus’ rule of 20 per cent makes such an outcome more likely, because there are fewer on-site alternatives to biomass that can hit the more challenging target.
With a hefty dose of bureaucratic oversight, perhaps the regulations could be adjusted to make it compulsory to use the renewable capacity. That might not be such a wonderful idea either. I spoke to Geoffrey Palmer, who as well as being an ardent environmentalist is the managing director of engineering firm Roger Preston Partners. Palmer ran up against the Merton Rule when refurbishing Elizabeth House, a large office block beside London’s Waterloo station: ‘We worked on various options,’ sighed Palmer, ‘but we always knew it was going to end up being biomass.’ To meet the rule given the size of the building, Palmer’s team designed a biomass boiler with a storage bunker the size of a 25-metre swimming pool – this held just fourteen days’ worth of fuel. Palmer calculated that keeping the bunker full of woodchips, pellets and IKEA offcuts would take two 30–40-ton lorries a week to drive right into the heart of London and reverse into Elizabeth House’s loading bay. This may not be the kind of thing we’d like to see enforced too rigidly.
Nor will building owners be keen to repair costly renewable energy sources if they break. Even the best machinery will need repairing eventually, and as renewable technologies are still young they can be especially prone to problems. ‘If you install PV solar panels on your roof, and they break down just after the five-year warranty,’ says Geoffrey Palmer, ‘you’re not going to pay to reinstall them.’
There are other problems with the Merton Rule. By demanding that the renewable capacity be located on the same site as the building, it closes off opportunities. A huge wind turbine on a nearby hill could be quite efficient, even when pitted against 2 billion years of concentrated energy resources in the form of coal or oil. A small wind turbine on a rooftop that is sheltered on all sides by other buildings isn’t ever going to do much more than keep your mobile phone charged. Geoffrey Palmer is working on a biomass system for a redevelopment of London’s iconic Battersea Power Station; as it sits on the River Thames, and woodchips can be easily shipped in by barge, this could provide enough renewable power not only for all of its own needs but potentially for other nearby developments, too. But the Merton Rule makes no allowance for such idiosyncratic local experiments.
We’ve seen again and again that the local context matters: it will often make a nonsense of plans that look good on paper, while suggesting ideas that seem strange but work perfectly on the ground. The Merton Rule takes no account of what is feasible on a particular site. Consider a new out-of-town supermarket, which may be a miniature environmental catastrophe in other ways but offers a big flat roof, perfect for solar panels; a big site that may also allow a decent-sized windmill; and huge potential underneath the car park for ground-source heat pumps. Ten per cent renewable capacity may be a ridiculously small target for such a development. On the flip side, high-rise office developments such as Elizabeth House are naturally energy-efficient because each floor provides heat to the floor above it – and when situated right next to a railway station, as Elizabeth House is, they encourage workers to commute on public transport rather than driving in. Is it reasonable to demand exactly the same on-site renewable energy generation at Elizabeth House that we demand at a big-box supermarket?
There is something perverse about all this. The Merton Rule appears to be every bit as clumsy as Geoff, the amateur environmentalist. In some ways it is clumsier: at least Geoff is likely to learn from his mistakes over time, but government regulations, by their very nature, tend to be somewhat impervious to the possibility of improvement.
And the Merton Rule is far from an isolated case. Look at policy after policy in country after country, and you see environmental regulations making the same mistakes. Sometimes the regulations are worse than useless; sometimes they are merely far less effective than they could be.
A famous example is the set of CAFE standards in the USA. CAFE stands for ‘corporate average fuel efficiency’, and the standards, introduced in 1975, were designed to improve the fuel efficiency of American cars. Yet the CAFE rules suffered from similar drawbacks to the Merton Rule. They incorporated separate and looser standards for ‘light trucks’ – at the time, a niche category covering largely commercial vehicles that were intended to carry cargo. But manufacturers realised that it was possible to build a car that looked like a light truck to the regulator, thereby sidestepping onerous rules. The result was that CAFE standards actively encouraged the emergence of a new breed of bigger, heavier car, and the efficiency of new cars sold in the US fell steadily between 1988 and 2003.
CAFE suffered from other Merton-style shortcomings. One was that there is no incentive for manufacturers to go beyond the standard, so once CAFE standards were achieved, improvements in engine technology that could have produced more efficient cars were instead used to make cars larger and faster. An exclusion for ethanol-burning vehicles created a class of cars that burned ethanol in theory but rarely used the capability in practice – very reminiscent of the unused Merton-compliant dual-fuel boilers. And on top of all that, even if the CAFE standards had created a new breed of super-efficient cars, they wouldn’t have encouraged their drivers to drive them less.
A third example of such unintended consequences comes from the European Union’s Renewable Energy Directive, which mandates that each EU member state will ensure that 10 per cent of the energy for transportation will come from renewable energy sources. In principle, this could refer to electric cars powered by windmills and solar panels. In practice, the cheapest and simplest option is to fill up conventional or slightly modified cars with liquid fuels such as biodiesel and ethanol. The consequences are now well known: arable land used for growing food can be used to grow corn to produce ethanol.
Meanwhile the actual contribution to fighting climate change of ethanol-powered cars is highly variable. Sugarcane ethanol can actually lower emissions by harnessing harmful byproducts such as methane; corn ethanol can actually be worse than gasoline, and palm-oil biodiesel grown on former rainforest land can be responsible for the release of over twenty times more carbon dioxide than good old gasoline. The impact of producing biofuels all depends on what crops are grown and how they are processed; the European rules do not yet reflect this, and if they try, they will struggle to do justice to the complexity. Three separate environmental regulations, designed to deal with three separate problems and promulgated by three very different institutions – the United States Congress, the European Commission, and Merton Borough Council – all suffer from similar weaknesses. This suggests that there is some important link which explains why it is hard to get these regulations right. But what?
Think back, for a moment, to chapter 1 and the video Karl Sims made of the strange creatures that evolved inside his computer. The evolutionary process was amazingly powerful: ‘Grab the red cube’, said Sims, and a huge range of different strategies evolved; ‘Swim’, he decreed, and creatures emerged that could swim, some strikingly familiar and some using techniques that seemed quite unearthly. As the biochemist Leslie Orgel famously remarked, ‘Evolution is cleverer than you are’, meaning that when an evolutionary process is let loose upon a problem, it will often find solutions that no human designer would have dreamed of.
But there is an unhelpful corollary to Orgel’s maxim: if the problem is misstated then evolution is likely to find loopholes few of us could have imagined. In biological evolution, of course, there is no one to misstate the objective. Genes succeed if they are passed down the generations. But with Karl Sims’s virtual evolution, it was Sims who set the criteria for reproductive success and the results were sometimes perverse. There is a revealing moment in the video which displays a creature that evolved to move quickly on land. The creature, a crude slab of a body with two blocks loosely attached, simply rolls around and around in a wide circle, its ‘head’ staying still while its ‘legs’, crossing and uncrossing, mark out the circle’s circumference. The virtual creature looks like one of life’s losers, but it isn’t: it’s a winner, because it is achieving the goal Karl Sims set: move quickly on a flat plane.
In chapter 1, we discovered that the economy is itself an evolutionary environment in which a huge variety of ingenious profit-seeking strategies emerge through a decentralised process of trial and error. As Leslie Orgel’s rule suggests, what emerges is far more brilliant than any single planner could have dreamed up. But as the dark side of Orgel’s rule predicts, if the rules of the economic game are poorly written, economic evolution will find the loopholes. That is why sensible-seeming environmental rules can produce perverse results: rainforest chopped down to produce palm oil; trucks laden with woodchips braving the congestion of central London; the rise and rise of the SUV. Evolution is smarter than we are, and economic evolution tends to outsmart the rules we erect to guide it.
Perhaps the mascot of these unlovely consequences should be the great British bulldog. This creature’s Churchillian jowls have made it one of the most charismatic and beloved of all thoroughbred dogs. The breed has a distinctive short nose, bow legs and folds of skin that make the dog’s face resemble a piece of scrunched-up velvet. It did not acquire these characteristics by accident: the bulldog is the product of over a century of careful selective breeding to produce the shortest noses, bowiest legs and scrunchiest, jowliest faces. Alas, the breed suffers from problems that are a direct consequence of its carefully selected physical appearance. Many bulldogs cannot mate without assistance because of sheer anatomical considerations. Artificial insemination is one solution. Recruiting three or four people to hold the dogs is another possibility. Special cradles are also available, and the manufacturers boast that with one of these cradles, bulldog mating becomes a one-person job – if one that still requires two bulldogs. But even when bulldogs do get pregnant, they often require a Caesarean section because bulldogs have big heads and small birth canals. Bulldogs, unlike most dogs, cannot regulate their temperature by panting, so are at risk of heat stroke. The adorable folds of skin around the eyes make them vulnerable to infected tear ducts. Bulldogs often breathe through, and damage, their voice boxes because the usual breathing passages are compressed. Evolution – and its perverse consequences – is smarter than pedigree dog breeders.
Just as Karl Sims and the breeders of bulldogs can cause malformed creations to prosper by changing the rules of the game, so can governments. In New Zealand in the 1970s, a bizarre new breed of business evolved: the ‘television assembly industry’, which approached Japanese manufacturers and commissioned them to gather together the component parts for their televisions and to ship them, neatly sorted and with instructions in English, to New Zealand. (This was disruptive for the Japanese, so the kits were more expensive than finished television sets.) The government had demanded that television sets be produced locally, a prohibitively expensive proposition for such a tiny economy. Local entrepreneurs figured out the cheapest way to do the job. Economic evolution was cleverer than the government of New Zealand – and it produced a spectacular economic bulldog.
The dark side of Leslie Orgel’s law means that whenever we leap to conclusions about what a particular solution would look like – buildings with inbuilt renewable energy capacity, or cars that run on biofuels – we are likely to discover unwelcome consequences. The Merton Rule, CAFE standards and other environmental regulations have produced a series of economic bulldogs – buildings and cars that tick all the regulatory boxes, but waste money on technology that will never be used and pass up opportunities to save carbon dioxide emissions in other ways.
While all these examples are depressing, they are also perversely inspiring. If the stroke of a legislator’s pen can cause Japanese television components to be shipped to New Zealand at greater expense than Japanese televisions, or propel trucks full of woodchips into the congested streets of central London, or have rainforests chopped down in the name of saving the planet, then all that is a testament to the unexpected ingenuity that can be unleashed when people have to adapt to new sets of rules. Better rules should turn Orgel’s law to our advantage, harnessing an ingenious, serendipitous process to produce environmental solutions from the most unexpected sources.
The root cause of the loophole problem is something we also met with the Merton Rule: the crucial difference between the letter and the spirit of the law. This point was hammered home to me over a world-saving coffee (I had an espresso; he had a soya cappuccino) with the environmental economist Prashant Vaze, author of The Economic Environmentalist. Vaze was waxing lyrical about the concept of the ‘nudge’, proposed by the behavioural economist Richard Thaler and polymath legal scholar Cass Sunstein. The idea is that subtle influences could be used to direct thoughtless behaviour, while preserving individual rights consciously to choose. For example, incandescent light bulbs – which are a very wasteful way to produce light, but preferred by people with partial sight and certain light-sensitive skin conditions – could be removed from open shelves, but available from storage on request. Nobody would buy such a light bulb out of carelessness, but someone who really wanted an incandescent bulb could seek one out without too much trouble.
The idea of a nudge itself is very clever. The idea of legislating one is more difficult. Vaze waved airily behind him towards the café counter as he related the classic Thaler–Sunstein nudge: the government could decree that the café’s healthy salads should be placed in a prominent position, and the fattening desserts tucked away somewhere less accessible.
The only problem was, the café didn’t sell any salads.
It’s not a coincidence that most of the best examples Thaler and Sunstein suggest are innovations in the private or voluntary sectors, usually from people with the ability to apply the spirit of the law as well as the letter of it. The prominent-salad nudge might work well for a healthy-eating drive in a workplace cafeteria, but if you tried to introduce it through legislation, what effect would it have? Perhaps legislators could mandate that all cafés had to offer salads, though that starts to look silly if we’re talking about an espresso bar on a railway station platform. An alternative is to say that if a café does offer salads, then the salads must be displayed prominently. But what if the salads are a minority interest and cakes and pastries make all the money? In that case the nudge might be a real money-loser; faced with a choice of prominently displaying salads or not offering salads at all, cafés might drop the healthy option entirely. It would be yet another economic bulldog.
A clumsy nudge is better than a clumsy shove or a clumsy ban, but it’s still clumsy. And since the language of ‘nudge’ became fashionable, it has itself come to suffer from lax definitions. I recently visited the UK Treasury to discover that officials were waxing lyrical about nudging through ‘choice editing’. ‘When you say, “choice editing”,’ I asked, ‘does that mean “banning things”?’ The sheepish reply was in the affirmative.
Which brings us back to the idea of a carbon tax – or more precisely, a carbon price, since the price of carbon-intensive goods can be raised either through taxes or through a tradable permit system. (The differences between a carbon permit scheme and a carbon tax are insignificant relative to the differences between having some kind of carbon price and not having one.)
Carbon pricing tries to harness Orgel’s law by focusing on what we think the ultimate goal is: a reduction of the greenhouse gas emitted into the atmosphere, at the lowest possible cost. To put it another way, carbon pricing hitches a ride on an amazing decentralised cloud computer – the markets that make up the world’s economy – to provide feedback to billions of individual experiments, all aimed at cutting carbon emissions, because cutting carbon emissions saves money.
Of course, it’s not that simple. The carbon price proposal raises many questions. Fortunately, because the idea has been around for a while, an army of policy wonks has had plenty of time to figure out some answers. The most important question seems to be: ‘Who should pay the carbon price?’ And the unexpected answer is ‘It doesn’t matter’. As a rough approximation, if the carbon price is 5 cents a kilogram of carbon dioxide – and assuming that methane emissions can be included – then the carbon price will raise the price of cheeseburgers by 12 cents. Consumers will pay more and producers will receive less, after the tax has been paid. But surprisingly, who takes the hit does not depend on whether the person who physically writes the cheque to the government is the beef farmer, the fast-food chain or the individual consumer.
There are more legitimate questions over the details of how a carbon price would be administered, but by far the most challenging issue is whether international agreement could ever be reached. Such agreement is needed, because carbon dioxide is a global pollutant – there is little point in tightening up on carbon dioxide and methane emissions in one country if other countries will opt out of the deal. But the agreement doesn’t have to be an all-singing and all-dancing allocation of pollution permits to every country across the next century. Even an informal agreement that each country will levy and enjoy the revenues of its own carbon tax, at levels roughly aligned with the taxes of others, would do much good.
A carbon price – even if it could be expanded beyond fossil fuels to reflect problems such as methane emissions, or direct carbon dioxide emissions from farming and cement production – would not solve the climate problem by itself. We know, from the experience of the energy crisis in the 1970s, that high energy prices spur energy-saving patents in every field from heat exchangers to solar panels. But as we saw in chapter 3, the innovation system could probably use some help, above and beyond the effect of a carbon price. Innovation prizes for low-carbon technologies are another essential way to stimulate a vast range of different experiments, each with the aim of providing a solution to part of the problem.
Nobody knows what an economy with a significant carbon price might look like – and that is the point. Orgel’s law tells us that economic evolution, with the playing field tilted by the new rule, ‘Greenhouse gases are expensive’, will produce entirely unexpected ways to reduce greenhouse gases. It’s probably a safe bet that cars would become more efficient, buildings would be built with more insulation and passive heating and cooling systems, and that we’d see more use of technologies such as nuclear, hydroelectric and even ‘carbon capture’ – preventing carbon dioxide emerging from a coal-fired power station. But what other changes we might see, who knows? Global supply chains might be reconfigured. Hundreds of millions of people might move to places where the climate or the geography allows a more energy-efficient lifestyle.
Or world-saving ideas could emerge from even more unexpected sources. If there was some way to reduce the methane being belched out by cows and sheep – almost a tenth of the total contribution to greenhouse gas emissions – then that would be a huge achievement. Australian scientists have realised that kangaroos don’t emit methane, and are even now trying to figure out how to get kangaroo-gut bacteria into the stomachs of cows. It may be a blind alley. It may not. But a proper price on greenhouse gases would encourage every path to be explored, even if one of the quests is simply to make cows belch like kangaroos.
Carbon pricing will work because it takes a global objective – reduce greenhouse gas emissions – and delegates that objective. Individuals like Geoff know their own circumstances and priorities. Businesses understand their costs. Entrepreneurs and engineers have myriad ideas waiting for the right business environment to make them profitable. Governments know very little of all this – but they do have the long-term perspective and the mandate to do what is best for society. Governments should not be picking and choosing, in our complex economies, specific ways to save the planet. They should be tilting the playing field to encourage us to make all our decisions with the planet in mind.
*I am using a rule of thumb among policy wonks that methane is about twenty times more potent than carbon dioxide. It’s complicated, though. Some scientists – for instance Drew Shindell of the NASA Goddard Institute – believe methane is more damaging than the rule of thumb implies. In any case, methane traps more heat than carbon dioxide, but also breaks down within a few years (into carbon dioxide and water vapour). How much more dangerous a greenhouse gas it is, then, depends on the time horizon over which we make the calculation.
*I am not advocating a particular level of carbon tax here, merely explaining the principle. A figure of $50 per tonne of carbon is not wildly out of line with informed estimates of a sensible carbon price, although the range of estimates is large.