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Location: > Prometheus: Energy Policy Archives

Contents:
The Central Question of Mitigation
   in Energy Policy April 22, 2008

A Post-Partisan Climate Politics?
   in Author: Pielke Jr., R. | Climate Change | Energy Policy | Science + Politics | Technology Policy April 21, 2008

Please Tell Me What in the World Joe Romm is Complaining About?
   in Author: Pielke Jr., R. | Climate Change | Energy Policy | Science + Politics | Technology Policy April 21, 2008

Kristof on PWG
   in Author: Pielke Jr., R. | Climate Change | Energy Policy | Technology Policy April 20, 2008

Bush CO2 Plan in Context
   in Author: Pielke Jr., R. | Climate Change | Energy Policy | Technology Policy April 17, 2008

Biofuels and Mitigation/Adaptation
   in Author: Pielke Jr., R. | Climate Change | Energy Policy | Technology and Globalization April 15, 2008

Food Price FAQs
   in Author: Pielke Jr., R. | Energy Policy | International | Technology and Globalization April 14, 2008

Holding the Poor Hostage
   in Author: Pielke Jr., R. | Climate Change | Disasters | Energy Policy April 11, 2008

Has German Policy Harmed Solar Power?
   in Author: Others | Energy Policy | Technology Policy April 10, 2008

Interview with Frank Laird
   in Author: Pielke Jr., R. | Climate Change | Energy Policy | Technology Policy April 09, 2008

Carbon Intensity of the Economy
   in Author: Pielke Jr., R. | Climate Change | Energy Policy April 08, 2008

Green Car Congress on PWG
   in Author: Pielke Jr., R. | Climate Change | Energy Policy | Risk & Uncertainty April 08, 2008

Joe Romm on Air Capture Research
   in Author: Pielke Jr., R. | Climate Change | Energy Policy | Technology Policy April 07, 2008

Gwyn Prins on PWG in The Guardian
   in Author: Pielke Jr., R. | Climate Change | Energy Policy | Technology Policy April 07, 2008

6 Days in 2012: Effect of the CDM on Carbon Emissions
   in Author: Pielke Jr., R. | Climate Change | Energy Policy March 19, 2008

UK Emissions
   in Author: Pielke Jr., R. | Climate Change | Energy Policy March 17, 2008

Interview at The Breakthrough Institute
   in Author: Pielke Jr., R. | Energy Policy | Environment | Science + Politics | Technology Policy March 04, 2008

Matthews and Caldeira on the Mitigation Challenge
   in Author: Pielke Jr., R. | Climate Change | Energy Policy | Technology Policy February 28, 2008

A Sense of Proportion
   in Author: Pielke Jr., R. | Climate Change | Energy Policy February 25, 2008

Carbon Emissions Success Stories
   in Author: Pielke Jr., R. | Climate Change | Energy Policy February 15, 2008

Worldwatch Wants You to Think
   in Author: Pielke Jr., R. | Energy Policy | Technology and Globalization January 18, 2008

Laboratories of Democracy? We Don't Need No Stinkin' Laboratories of Democracy
   in Author: Pielke Jr., R. | Energy Policy December 20, 2007

Shellenberger on Bali
   in Author: Pielke Jr., R. | Climate Change | Energy Policy | International December 17, 2007

China's Growing Emissions
   in Author: Pielke Jr., R. | Climate Change | Energy Policy December 16, 2007

Chris Green on Emissions Target Setting
   in Author: Pielke Jr., R. | Climate Change | Energy Policy | Technology Policy December 14, 2007

Reality Check
   in Author: Pielke Jr., R. | Climate Change | Energy Policy | International December 13, 2007

Fun With Carbon Accounting
   in Author: Pielke Jr., R. | Climate Change | Energy Policy December 12, 2007

Lieberman-Warner
   in Author: Hale, B. | Climate Change | Energy Policy | Environment December 05, 2007

It Will Take More than Holocaust Analogies
   in Author: Pielke Jr., R. | Climate Change | Energy Policy November 26, 2007

Not Ambitious Enough
   in Author: Pielke Jr., R. | Energy Policy November 14, 2007

A Range of Views on Prins/Rayner
   in Author: Pielke Jr., R. | Climate Change | Energy Policy October 30, 2007

Late Action by Lame Ducks
   in Author: Pielke Jr., R. | Climate Change | Energy Policy September 29, 2007

The nothingness that is the new energy bill
   in Author: Vranes, K. | Energy Policy June 27, 2007

A little percolation on energy policy
   in Author: Vranes, K. | Energy Policy June 11, 2007

Curious quote from the recalcitrant
   in Author: Vranes, K. | Energy Policy June 06, 2007

The messy and messier politics of AGW solutions
   in Author: Vranes, K. | Climate Change | Energy Policy May 29, 2007

--It's sort of a screw-up--
   in Author: Vranes, K. | Energy Policy May 09, 2007

A preview of things to come
   in Author: Vranes, K. | Climate Change | Energy Policy May 02, 2007

taking options off the table....
   in Author: Vranes, K. | Energy Policy May 01, 2007

The Politics of Air Capture
   in Author: Pielke Jr., R. | Climate Change | Energy Policy | Science + Politics | Technology Policy April 26, 2007

Frank Laird on Peak Oil, Global Warming, and Policy Choice
   in Author: Pielke Jr., R. | Climate Change | Energy Policy | Technology Policy April 16, 2007

New Peer-Reviewed Publication on the Benefits of Emissions Reductions for Future Tropical Cyclone (Hurricane) Losses Around the World
   in Author: Pielke Jr., R. | Climate Change | Disasters | Energy Policy April 12, 2007

The series of tubes pumps internets and horses and oil and gas
   in Author: Vranes, K. | Energy Policy April 10, 2007

The state push to the federal push
   in Author: Vranes, K. | Climate Change | Energy Policy March 21, 2007

The future of coal
   in Author: Vranes, K. | Energy Policy March 14, 2007

Al Gore 2008, Part 3: Washington Post on California Energy
   in Author: Pielke Jr., R. | Energy Policy | Science + Politics February 20, 2007

Understanding US Climate Politics
   in Author: Pielke Jr., R. | Climate Change | Energy Policy February 07, 2007

SOTU '07: An A or a D+ ?
   in Author: Vranes, K. | Climate Change | Energy Policy January 25, 2007

A Report from the Bureaucracy
   in Author: Pielke Jr., R. | Energy Policy January 24, 2007

Will Toor on the CU Power Plant
   in Author: Others | Climate Change | Energy Policy January 24, 2007

Hypocrisy Starts at Home
   in Author: Pielke Jr., R. | Climate Change | Education | Energy Policy January 20, 2007

The Steps Not Yet Taken
   in Author: Pielke Jr., R. | Climate Change | Disasters | Energy Policy January 08, 2007

Meantime, Back in the News Section
   in Author: Pielke Jr., R. | Energy Policy January 07, 2007

Profiling Frank Laird
   in Author: Pielke Jr., R. | Climate Change | Energy Policy | Technology Policy January 02, 2007

And I'm focused on adaptation?
   in Author: Pielke Jr., R. | Climate Change | Energy Policy December 22, 2006

Senator Coal and King Coal
   in Author: Pielke Jr., R. | Climate Change | Energy Policy | Science + Politics December 15, 2006

Disquiet on the Hurricane Front
   in Author: Pielke Jr., R. | Climate Change | Disasters | Energy Policy December 11, 2006

Roger A. Pielke Jr.’s Review of Kicking the Carbon Habit: A Rebuttal by William Sweet
   in Author: Others | Climate Change | Energy Policy December 04, 2006

What Just Ain't So
   in Climate Change | Energy Policy October 18, 2006

Climate Porn
   in Author: Pielke Jr., R. | Climate Change | Energy Policy August 03, 2006

Energy Dependence, Part 2
   in Author: Pielke Jr., R. | Energy Policy July 06, 2006

Energy Dependence
   in Author: Pielke Jr., R. | Energy Policy July 06, 2006

New anti-wind politics details. Oh the irony, Senator Warner.
   in Author: Vranes, K. | Energy Policy June 08, 2006

Petropolitics, MoveOn.org, and The Politics of Decarbonization
   in Author: Pielke Jr., R. | Energy Policy June 02, 2006

PeakOil: whom do you believe? ChevronTexaco or ExxonMobil?
   in Author: Vranes, K. | Energy Policy May 04, 2006

Some Simple Economics of Taking Air Capture to the Limit
   in Author: Pielke Jr., R. | Climate Change | Energy Policy April 20, 2006

Forbidden Fruit: Justifying Energy Policy via Hurricane Mitigation
   in Author: Pielke Jr., R. | Climate Change | Disasters | Energy Policy March 15, 2006

Senators Seeking Response to Climate Change White Paper
   in Author: Vranes, K. | Energy Policy February 28, 2006

Political Plate Tectonics and Energy Policy
   in Author: Pielke Jr., R. | Energy Policy February 08, 2006

EPA Fuel Efficiency
   in Author: Pielke Jr., R. | Energy Policy July 29, 2005

Cart or Horse?
   in Author: Pielke Jr., R. | Energy Policy May 19, 2005

Bush Administration Goes Nuclear
   in Author: Pielke Jr., R. | Energy Policy April 28, 2005

The Coming Debate over Nuclear Power
   in Author: Pielke Jr., R. | Energy Policy March 28, 2005

Connecting Dots for a Nuclear Stratagem
   in Author: Pielke Jr., R. | Energy Policy March 24, 2005

There is a Lesson Here
   in Author: Pielke Jr., R. | Energy Policy January 26, 2005

Bring the Policy Back In
   in Author: Pielke Jr., R. | Energy Policy October 21, 2004

An Equation for Science in Politics: SM = f(PP)
   in Author: Pielke Jr., R. | Energy Policy | Science Policy: General October 11, 2004

The Politics of Personal Virtue and Energy Policies
   in Author: Pielke Jr., R. | Energy Policy August 20, 2004

Blackouts Are Inevitable
   in Author: Fisher, E. | Energy Policy August 12, 2004

Designing the Electric Grid
   in Author: Ryen, T.S. | Energy Policy August 10, 2004

Distinguishing Climate Policy and Energy Policy: Follow Up
   in Author: Pielke Jr., R. | Climate Change | Energy Policy July 27, 2004

Distinguishing Climate Policy and Energy Policy
   in Author: Pielke Jr., R. | Climate Change | Energy Policy July 26, 2004

Confusion about Science and Policy
   in Author: Pielke Jr., R. | Energy Policy | Risk & Uncertainty July 15, 2004

Yucca Mountain, Politics, Science, and the NRC
   in Author: Pielke Jr., R. | Energy Policy | Science Policy: General July 12, 2004

Frames Trump the Facts
   in Author: Pielke Jr., R. | Climate Change | Energy Policy | Environment | Water Policy June 29, 2004

Singing from the Same Sheet
   in Author: Pielke Jr., R. | Energy Policy April 29, 2004

Country of Origin Labels for Gasoline
   in Author: Pielke Jr., R. | Energy Policy | Environment April 19, 2004



April 22, 2008

The Central Question of Mitigation

The central question can be found at the bottom of this long, technical post. In 1998 Hoffert et al. published a seminal paper in Nature (PDF) which argued that:

Stabilizing atmospheric CO2 at twice pre-industrial levels while meeting the economic assumptions of "business as usual" implies a massive transition to carbon-free power, particular in developing nations. There are no energy systems technologically ready at present to produce the required amounts of carbon-free power.

Hoffert et al. provide a figure which illustrates the amount of carbon-free energy that will be needed assuming that concentrations of carbon dioxide are to be stabilized at 550 ppm, and the global economy grows at 2.9% per year to 2025 and 2.3% per year thereafter. I have updated this figure to 2008 (estimated) values as indicated below.

carbonfreeenergy.png

The figure shows carbon free energy required to achieve stabilization at 550 ppm carbon dioxide as a function of the rate of average energy intensity decline. The figure also shows 1990 total energy consumption (about 11 terawatts, TW) and the share of this valuefrom carbon-free sources (about 1.2 TW). I have updated both of these values to 2008 using data from the EIA, which I extrapolated to 2008 values, for which I arrive at 17.4 TW of total energy consumption of which 2.4 TW are carbon-free.

Hoffert et al. estimated that we'd need 10-30 TW of carbon free primary energy production by 2050, assuming energy intensity declines of 1.0-2.0% over the first 5 decades of the 21st century. So far at least, that assumption has proved optimistic, as actual energy intensity has increased, as indicated by the blue dot on the leftward-extended horizontal axis. If energy intensity does not improve beyond this value then the world will need 22 TW of carbon-free energy by 2025, and if this value works out to a net 0.5% decline through 2025, then this figure would be halved to 11 TW. For 2050 the values are 51 and 25 TW respectively.

The units of energy can be difficult to interpret. How much is 10 TW of energy? A run-of-the-mill nuclear power plant provides about 500 megawatts; so if you have 200 of these then you have 1 terawatt. So 2,000 nuclear plants -- or the equivalent -- by 2025 would do the trick of providing 10 TW.

In a subsequent paper in Science 2002 Hoffert et al. discuss the options available to meet technological challenge of providing 10 TW of carbon-free energy:

Combating global warming by radical restructuring of the global energy system could be the technology challenge of the century. We have identified a portfolio of promising technologies here--some radical departures from our present fossil fuel system. Many concepts will fail, and staying the course will require leadership. Stabilizing climate is not easy. At the very least, it requires political will, targeted research and development, and international cooperation. Most of all, it requires the recognition that, although regulation can play a role, the fossil fuel greenhouse effect is an energy problem that cannot be simply regulated away.

They responded to critiques of their 2002 paper with this (emphasis added):

Market penetration rates of new technologies are not physical constants. They can be strongly impacted by targeted research and development, by ideology, and by economic incentives. Apollo 11 landed on the Moon less than a decade after the program started. We are confident that the world's engineers and scientists can rise to the even greater challenge of stabilizing global warming. But it does not advance the mitigation cause to gloss over technical hurdles or to say that the technology problem is already solved.

Any discussion of the technologies needed to stabilize carbon dioxide concentrations is incomplete without showing the arithmetic of energy production and consumption. This simple math is too often overlooked in the highly politicized to and fro over mitigation.

The central question of the mitigation challenge is thus the following: What technologies will provide the world's future power needs, and do so in a carbon-free manner? Show your work.

Posted on April 22, 2008 01:28 AM View this article | Comments (0)
Posted to Energy Policy

April 21, 2008

A Post-Partisan Climate Politics?

Californina Governor Arnold Schwarzenegger provides a positive and optimistic view of of climate policy in a speech yesterday at Yale. You can watch it here. Here is an excerpt:

So I urge you to continue to be open‑minded on our environment. Do not dismiss or do not accept an idea because it has a Republican label or a Democratic label or a conservative label or a liberal label. Think for yourself. This is especially true on environment. So I have great faith in your ability to find new answers and to find new approaches. Don't accept what the old people say. Don't accept the old ways. Don't accept the old ways or the old politics of Democrats and Republicans. Stir things up. Be fresh and new the way you look at things.

Is a post-partisan climate politics possible?

Please Tell Me What in the World Joe Romm is Complaining About?

Joe Romm has continued his hysterical, content-free attacks on me and my colleagues for daring to suggest a view not 100% the same as his own. How dare we. After taking a close look at some of Joe’s writing, it turns out that he seems to agree with just about everything I’ve written on energy policy, and his continued (mis)characterizations of my views simply don’t square with what I’ve actually written.

Here are some examples:

On whether current projections of future emissions growth may possibly underestimate the mitigation challenge, Joe agrees with us that they just might:

[Socolow and Pacala] assume "Our BAU [business as usual] simply continues the 1.5% annual carbon emissions growth of the past 30 years." Oops! Since 2000, we’ve been rising at 3% per year (thank you, China). That means instead of BAU doubling to 16 GtC in 50 years, we would, absent the wedges, double in 25 years. That would mean each wedge needs to occur in half the time, assuming our current China-driven pace is the new norm (which is impossible to know, but I personally doubt it is). . . A similar problem to this is that many of the economic models used by the IPCC assume BAU rates of technology improvement and energy efficiency that are very unlikely to occur absent strong government action, so they are probably overly optimistic.

This last statement is of course exactly what we say in our Nature paper. So our argument about the possibility of understating the magnitude of the mitigation challenge that that Romm has criticized repeatedly (without actually questioning our numbers, but writing a lot of overheated prose), he in fact agrees with. Interesting. Weird.

In addition, I have never written anything against the deployment of existing carbon-free technologies. Quite the opposite. So when Romm says that I have called for an R&D-only approach he is either ignorant or lying, to be blunt. In fact I have argued for a vigorous short-term focus, such as in testimony before the U.S. Congress in 2006 (PDF:

When it comes to effective substantive action on mitigation, I would argue that the available research and experience shows quite clearly that progress is far more likely when such actions align a short-term focus with the longer-term concerns. In practice, this typically means focusing such actions on the short-term, with the longer-term concerns taking a back seat. Examples of such short-term issues related to mitigation include the costs of energy, the benefits of reducing reliance on fossil fuels from the Middle East, the innovation and job-creating possibilities of alternative energy technologies, particulate air pollution, transportation efficiencies, and so on.

And last year Dan Sarewitz and I wrote more specifically of how such a challenge would be met in practice (PDF. After reading Romm's writings, I cannot figure out at all what in the world Joe Romm would disagree with in the following:

Nevertheless, the broad and diverse portfolio of policies and programs necessary to catalyze a long-term technological transformation to a low-carbon energy system is reasonably well understood, even if the path and timing of the transition cannot be precisely engineered. These measures include robust public funding for research spanning the gamut from exploratory to applied; pilot programs to test and demonstrate promising new technologies; public-private partnerships to incentivize private sector participation in high risk ventures (such as those now used to induce pharmaceutical companies to develop tropical disease vaccines); training programs to expand the number of scientists and engineers working on a wide variety of energy R&D projects; government procurement programs that can provide a predictable market for promising new technologies; prizes for the achievement of important technological thresholds; multilateral funds for collaborative international research; international research centers to help build a global innovation capacity (such as the agricultural research institutes at the heart of the Green Revolution); as well as policy incentives to encourage adoption of existing and new energy-efficient technologies, which in turn fosters incremental learning and innovation that often leads to rapidly improving performance and declining costs.

In fact, significant aspects of such a portfolio were proposed and modestly funded during the Clinton Administration in the mid 1990s (Holdren and Baldwin, 2002), but they were politically doomed from the outset because they were too narrowly promoted as climate change policies, rather than as advancing a broad set of national interests and public goals and goods. They did not survive into the Bush Administration; nor did they significantly find their way into the international climate regime. Indeed, the Kyoto approach is a disincentive to implementing many of the sorts of measures listed above because they will not contribute to a nation’s ability to meet its short-term targets.

So Joe Romm’s continued, overheated, and plain weird attacks are difficult to interpret given that that he (a) has written that he agrees with our analysis of the possibility that current baseline expectations for future energy use may underestimate the challenge of mitigation, and (b) he completely ignores the fact that I have consistently supported a broad approach to innovation, including a focus on R&D, but much more. It is true that Joe Romm and I disagree about the value of adaptation, but his complaints of late have been about mitigation. But even if we disagree a bit on the specifics of climate policy, so what? Is his energy really best spent attacking others trying to address this challenge in good faith?

I certainly can’t figure out his incessant attacks and name-calling, but it looks increasingly like they have nothing to do with the merits of our views on mitigation, since they appear to be pretty compatible. Should Joe continue to play the mischaracterization and attack game, I will respond as needed, but I am hoping that he can instead focus on making positive arguments for particular policies, and leave the junior high school chest thumping where it belongs.

April 20, 2008

Kristof on PWG

Nicholas Kristof has a column in the Sunday NYT on the recent Nature paper by Tom Wigley, Chris Green, and me. Here is an excerpt:

Three respected climate experts made that troubling argument in an important essay in Nature this month, offering a sobering warning that the climate problem is much bigger than anticipated. That’s largely because of increased use of coal in booming Asian economies.

For example, imagine that we instituted a brutally high gas tax that reduced emissions from American vehicles by 25 percent. That would be a stunning achievement — and in just nine months, China’s increased emissions would have more than made up the difference.

China and the United States each produces more than one-fifth of the world’s carbon dioxide emissions. China’s emissions are much smaller per capita but are soaring: its annual increase in emissions is greater than Germany’s total annual emissions.

Please read the whole thing.

And if you are new to our site -- Welcome! -- and you can find our Nature paper here (in PDF), a short essay on adaptation here (in PDF), and my book The Honest Broker, here.

April 17, 2008

Bush CO2 Plan in Context

For those of you who might wish to place the plans announced by President Bush yesterday into context, according to data from the US EIA (xls):

US CO2 emissions from 2026-2030 are projected to increase by only 0.84% per year. So stabilizing at 2025 levels is not an ambitious goal, given the small rate of increase projected to be occurring for the US at that time. To put this another way, the average annual increase in US emissions from 2025 to 2030 will be equal to about 2.5 days of China’s projected 2030 emissions also using projections from the EIA (which in fact probably represents a dramatic underestimate of where China’s emissions are actually headed, as we suggested in Nature two weeks ago). For those wanting to spin things the other way, you might point out that the proposed five year effects on carbon dioxide of Bush's plans 2026-2030 are about twice the magnitude of the proposed five year effects of the Clean Development Mechanism under the Kyoto Protocol.

April 15, 2008

Biofuels and Mitigation/Adaptation

In Europe the debate over biofuels production targets has become the most recent example of the larger debate over mitigation versus adaptation. Biofuels have been held up by some as offering a carbon-neutral alternative to fossil fuels, and thus contributing in some way to the mitigation of climate change. The European Union has gone so far as to adopt biofuel production targets.

At the same time the world has seen food prices increase dramatically in recent times with some people pointing a finger at biofuels as contributing to those price increases. The increased price of food means that those with the most tenuous access to nutrition could slip into malnutrition or worse. This is why one UN official called biofuels production policies a "crime against humanity."

Deutsche Welle has a nice overview:

The European Union said it is sticking to its biofuel goals despite mounting criticism from top environmental agencies and poverty advocates.

"There is no question for now of suspending the target fixed for biofuels," Barbara Helfferich, spokeswoman for EU Environment Commissioner Stavros Dimas said Monday, April 14.

But her boss struck a different tone, acknowledging that the EU had underestimated problems caused by biofuels and saying that the 27-nation block planned to "move very carefully."

Yet the EU is wary of abandoning biofuels amid worries that doing so could derail its landmark climate change and energy package. In it, Europe pledged to reduce carbon dioxide emissions by 20 percent by 2020. Part of the package includes setting a target for biofuels to make up 10 percent of automobile fuel.

Biofuel a culprit in food crisis

Jean ZieglerBildunterschrift: Großansicht des Bildes mit der Bildunterschrift: Ziegler called biofuel a "crime against humanity"

In recent months food prices have increased sharply. Biofuels are seen as one of several culprits. Land that used to be planted with food crops has been converted to biofuel production, which has increased prices.

UN Special Rapporteur for the Right to Food Jean Ziegler told German radio Monday that the production of biofuels is "a crime against humanity" because of its impact on global food prices.

The UN's Ziegler isn't alone in his criticism of biofuel.

The debate over biofuels illustrates that the debate over mitigation and adaptation is not just academic, but reflected in real world outcomes. It also highlights that policies can have unintended consequences. If we factor in recent research that claims that the carbon-cutting potential of biofules has been overstated, then it appears that the high hopes for biofuels as a contributor to mitigation probably need to be scaled back dramatically.

April 14, 2008

Food Price FAQs

Here are a few useful FAQs on recent increasing prices of food around the world:

International Monetary Fund (FAQ link)

UN Food and Agriculture Organization (FAQ link)

World Bank (Link)

Gary Becker and Richard Posner (Link)

Please feel free to add useful resources in the comments.

April 11, 2008

Holding the Poor Hostage

Anyone who wants to see how the misplaced opposition to adaptation actually hurts poor people need look further than thie report out today from ClimateWire:

Environmental and humanitarian activist groups plan to formally ask the World Bank to back away from plans to create a $500 million trust fund aimed at helping poor nations cope with climate change.

The letter, which representatives of several organizations confirmed Thursday is being drafted and will be signed by more than 100 organizations, comes as the World Bank and International Monetary Fund launch their 2008 spring meeting, attended by finance ministers from across the world.

Among the reasons cited for opposing adaptation funds is that the World Bank is supporting the development of a giant coal plant in India:

Groups said their overarching concern, though, is the World Bank's fossil fuel-rich energy portfolio. The bank's approval this week of $450 million for a major coal-fired power plant in India, many said, undermines its attempts to go green.

"There's a lot of concern about the World Bank taking over of the [adaptation program] because of their ongoing funding of fossil fuel projects," said Steve Kretzmann, executive director of Oil Change International, a nonprofit group based in Washington that advocates for clean energy and against foreign aid to the international oil industry.

"It is not a credible institution for managing these funds, especially given its poor environmental track record," added Karen Orenstein, extractive industries campaign coordinator with the environmental nonprofit Friends of the Earth.

"If the World Bank is truly interested in being a leader in fighting climate change, they shouldn't start out by financing a huge mega-coal project," she said.

So you read that right, lets take away money that could have positive benefits improving the lives of people in the developing world because of concerns about a fossil fuel project. This is a real-world example of how continuing efforts to place adaptation in opposition to mitigation have a material effect on people's lives.

Does anyone really think that opposing energy development and adaptation will make the climate agenda more appealing to people in India? Why can't these groups support adaptation and clean energy at the same time, rather than placing them in opposition?

April 10, 2008

Has German Policy Harmed Solar Power?

A Guest Post by Greg Nemet, University of Wisconsin.

The Economist has an article this week with the title "bureaucratic meddling has harmed solar power."

The article points out correctly that the cost of solar power has stopped falling in the past couple of years as a result of scarcity of purified silicon, the main material used to make solar panels. It's an informative article…as long as you ignore the headline and the conclusion that governments should not interfere with the development of new technologies.

Any subsidy program will put upward pressure on prices in the near term, as people are generally willing to pay more for something when someone else pays part of the cost. The important question is what happens in the longer term. And despite the recent rise in prices, the subsidy program in Germany and the market for solar it has created over the past eight years, have set in motion promising trends: new purified silicon plants are coming on line that will make the input material for solar panels much cheaper, the rise in silicon cost has led to rapid reductions in the amount of material used, and the scale of demand has made it worthwhile for German machine tool companies to develop PV-specific manufacturing machinery that they now export to low-cost PV factories in China. These developments are highly promising for cheaper PV; and they are very closely tied to important policy innovations, also known as "bureaucratic meddling."

The bigger problem, that the article misses, is that the solar technology being used today is unlikely ever to get cheap enough for truly massive deployment, even if the factors above engender substantial cost reductions in the next several years. In a recent study (PDF), we compared the effects of subsidies and R&D on the cost of solar power and found that you can't get to really cheap solar with subsidies alone. Subsidies can help enable economies of scale and learning-by-doing, but they are not enough. Technology breakthroughs are also needed if PV is going to get cheap enough to compete with coal or gas or, eventually, nuclear power—even with high carbon prices. Some of the technical improvements that will enable commercialization of cheap PV are certainly best left to the private sector. But the history of technology policy suggests that the fundamental breakthroughs required will need to come from more bureaucratic meddling in the form of publicly sponsored R&D funding.

Posted on April 10, 2008 02:13 AM View this article | Comments (0)
Posted to Author: Others | Energy Policy | Technology Policy

April 09, 2008

Interview with Frank Laird

Center faculty affiliate Frank Laird is interviewed over at the Breakthrough Institute on energy policy and climate change.

April 08, 2008

Carbon Intensity of the Economy

It is always good when debates can be resolved by appeals to data, because it helps to eliminate ambiguity.

Joe Romm expressed concern that I had shown a graph of energy intensity of the global economy to suggest that the overall decarbonization of the global economy did not decrease over the poeriod 1890-1970. That was this figure:

GEI.png

Romm explained to his readers how serious a mistake I had made:

Obviously carbon per GDP can go in a completely different direction than energy per GDP. If Pielke’s analytical mistake isn’t crystal clear to anyone reading this blog, please let me know. So my problem with him isn’t semantics. Pielke’s argument is simply wrong. His analysis is flawed.

OK Joe, lets look at carbon per GDP over the same time period:

CI of GDP.png

Readers are now in a position to judge for themselves whether or not the argument I made is materially affected in this case by using one figure over the other. The alternative perhaps is that Joe Romm is trying to make a mountain out of a molehill. As I said, thank goodness for data.

Green Car Congress on PWG

Here is a link to an excellent summary and thoughtful discussion of our Nature Commentary (PWG) at Green Car Congress written by Jack Rosebro.

April 07, 2008

Joe Romm on Air Capture Research

Joe Romm, whose voluminous, hysterical attacks on me and my co-authors Tom Wigley and Chris Green have become somewhat cartoonish, has far more in common with my views than he thinks. Here is what he says on a recent Real Climate post on air capture:

But we should surely do a fair amount of research on air capture, since, by not later than the 2020s, we’re going to get desperate for emissions reductions, and by the 2030s, we’re going to be very desperate and willing to pursue expensive options we that aren’t yet politically realistic.

Investment in research to support a potential breakthrough new technology -- what a great idea Joe!

Gwyn Prins on PWG in The Guardian

Gwyn Prins, a professor at the London School of Economics who is also a friend and collaborator, has a thoughtful op-ed in The Guardian with his views on the significance of our Nature commentary of last week. Here is an excerpt:

The global economy is not decarbonising - it is recarbonising. This was noticed by the experts in the IPCC but not reported in its Summary for Policymakers, the politically negotiated document mostly read by politicians and journalists. If the free rider of decarbonisation is not available, the challenge to move quickly to a radically different type of global climate policy is all the greater.

What would a materially effective policy do? It would break the link between poverty reduction and carbon emission. It would recognise that the developing world needs to consume - and will consume - more energy, not less. It would recognise that attempting to control human-created carbon emissions by setting binding output targets and relying on artificial carbon markets and dodgy offsets, as Kyoto does, has not and never will work.

Such policy would shift to the input side, and concentrate on radical improvements in the production and use of energy. It would focus first on the sectors of all economies that are the heaviest consumers of energy: power generation, building, cement and metals production. The sectors that western environmentalists have prioritised hitherto, such as road and air transport, should be much further down the list. If all automobile use in the US stopped tonight, the reduction in global emissions would be less than 6%. Instead, there must be a much larger commitment to fundamental energy technology research and development.

Read it here.

March 19, 2008

6 Days in 2012: Effect of the CDM on Carbon Emissions

This is a somewhat technical post on a fairly narrow issue. This week in class we had the pleasure of a visit by Wolfgang Sterk from the Wuppertal Institute (in Germany), who provided a really excellent presentation on the Clean Development Mechanism (CDM) of the Kyoto Protocol and the European Emissions Trading Scheme.

His presentation discussed, and also raised some further questions about, the effectiveness of the CDM. So out of curiosity I have asked, and answered below, the question: What effect does the CDM have on carbon dioxide emissions to 2012?

The answer can be determined by looking at the excellent database of CDM projects provided by the Institute for Global Environmental Strategies in Kanagawa, Japan.

What I did first is exclude all non-carbon dioxide-related projects in the CDM database. I then included projects that are "registered" (in the works) and "issued" (in the pipeline), and assumed that all projects so listed will be in fact implemented with 100% success.

Through 2012, the total reductions in future carbon dioxide emissions under the CDM totals about 175 millions tons of carbon, or about 35 million tons of carbon per year.

How much is this amount of carbon?

This means that the cumulative emissions that would have occurred on January 1, 2012 will now occur before noon on January 7, 2012. You read that right. The cumulative effect of the CDM on carbon dioxide emissions is to delay total emissions by about 6.5 days.

To be fair the CDM was never designed to be a solution to the climate problem. But even so, this seems to me to be an exceedingly small impact for such an incredibly complex program. I can not explain how complex it is (see the PDF linked in the following sentence). In fact, simply taking an unscientific qualitative ratio of complexity (PDF) to effectiveness (6 and a half days delay in cumulative emissions), I have come to the conclusion that the CDM offers little hope of contributing much to the challenge of transforming the global energy system. If it is part of the solution, then it is an understatement to say that that it it is a very, very, very, very small part.

March 17, 2008

UK Emissions

UK CO2.png

The graph above is from a report (PDF) of the UK government's National Audit Office, which explains some of the difficulties in accounting for carbon emissions at the national level.

The report has received some attention for this figure and what the following passage means for emissions reduction targets currently under consideration by the UK Parliament:

Figure 13 demonstrates that there have been no reductions in UK carbon dioxide emissions if measured on the basis of the Accounts rather than on the basis of the IPCC/Kyoto reporting requirements.

One point worth making is that the difference between UK Environmental Accounts and Kyoto accounting stems from international aviation and shipping (not included by Kyoto) and the treatment of tourists and nonresidents in the UK. These sort of issues obviously play a large role in the ability of countries to meet Kyoto targets. One wonders what the effect on the ability of countries to meet Kyoto targets would be if carbon emissions were accounted for on an UK Environmental Accounting Basis.

It would seem that the passage of ambitious targets and timetables for UK emissions reductions has been made less likely by this report, and yet at the same time it can't be good news for those wanting that third runway at Heathrow.

March 04, 2008

Interview at The Breakthrough Institute

I've gladly accepted an invitation to join The Breakthrough Institute as a 2008 Senior Fellow. They have an interview with me up on their blog here. And I'll be blogging over there regularly.

If you are not familiar with their advocacy efforts, check them out and add their blog to your blogroll.

February 28, 2008

Matthews and Caldeira on the Mitigation Challenge

Just when you thought that the mitigation challenge was dismal, Matthews and Caldeira publish a paper in GRL suggesting that things are in fact worse than that:

In the absence of human intervention to actively remove CO2 from the atmosphere [e.g., Keith et al., 2006], each unit of CO2 emissions must be viewed as leading to quantifiable and essentially permanent climate change on centennial timescales. We emphasize that a stable global climate is not synonymous with stable radiative forcing, but rather requires decreasing greenhouse gas levels in the atmosphere. We have shown here that stable global temperatures within the next several centuries can be achieved if CO2 emissions are reduced to nearly zero. This means that avoiding future human-induced climate warming may require policies that seek not only to decrease CO2 emissions, but to eliminate them entirely.

Have we mentioned that air capture is coming? And that is whether we like it or not.

February 25, 2008

A Sense of Proportion

3rd runway protest.jpg

At London's Heathrow airport today environmental activists evaded security and climbed onto the tail of a British Air 777 to protest plans for building a third runway at the airport.

Meantime, last month the Chinese government announced plans to build 97 new airports in the next 12 years.

China announced plans Saturday to build nearly 100 new airports by 2020 to cater for soaring demand.

The proposals will mean eight out of every ten residents will live within 100 kilometres (60 miles) of an airport within 12 years, the General Administration of Civil Aviation said.

It put the cost of building the 97 new airports at 450 billion yuan (61.6 billion dollars).

Air traffic volume rose 16 percent to 185 million passengers in 2007, according to official figures.

The General Administration predicts passenger traffic will grow by 11.4 percent a year between now and 2020, and freight traffic by 14 percent.

The number of airports serving more than 30 million passengers a year will rise from three now to 13, it said.

Posted on February 25, 2008 09:20 AM View this article | Comments (1)
Posted to Author: Pielke Jr., R. | Climate Change | Energy Policy

February 15, 2008

Carbon Emissions Success Stories

Andy Revkin has an interesting post up about per capita emissions in various countries around the world. What countries have a per capita emissions level consistent with an 80 percent reduction from the world's current total emissions?

hypothetical emissions.png

The answer, as can be seen above in an image that I use in lectures (data from US EIA), is Haiti and Somalia. If everyone in the world lived as they do in these two countries, we'd have the emissions challenge licked.

What about the eco-sensitive UK? Sorry, if everyone lived as they do in the UK global carbon emissions would be more than twice the current world total. What about everyone lived as they do in eco-friendly Sweden? Sorry, emissions would be about one and a half times the current world total. United States? Don't even ask. China? just slightly below the current world total (and growing fast).

Bottom line? No country, save Haiti and Somalia, is currently producing emissions at a level even remotely consistent with levels consistent with an 80% reduction in the world's totals. Hence, all of the finger pointing and debates in political negotiations are based on relative hypocrisy ("We're doing relatively less bad that you are!") or faith-based assumptions in the efficacy of future policies ("Our targets are more aggressive than yours!").

There remains huge hurdles to achieving emissions reductions of the sort called for in current political debate. Until we see evidence of it actually occurring, somewhere, we should be very cautious about picking what policies will ultimately achieve results. Instead, we should try a diversity of approaches and see what works.

Posted on February 15, 2008 10:39 AM View this article | Comments (1)
Posted to Author: Pielke Jr., R. | Climate Change | Energy Policy

January 18, 2008

Worldwatch Wants You to Think

prius v nano.png

Worldwatch asks a challenging question:

One car gets 46 miles per gallon, features fancy accessories, and sports two engines with a combined 145 horsepower. The other car reportedly gets 54 miles per gallon, runs on a diminutive 30-horsepower engine, and is positively spartan in its interior trimmings. The first is a darling of the environmentally conscious. The latter is reviled as a climate wrecker. These two vehicles are the Toyota Prius and the newly unveiled Tata Nano, dubbed "the people’s car." Is there a double standard?

December 20, 2007

Laboratories of Democracy? We Don't Need No Stinkin' Laboratories of Democracy

Yesterday, the U.S. Environmental Protection Agency denied a request from the state of California for permission to exceed national standards on automobile emissions. It was the first such denial since the Clean Air Act was originally passed, marking a departure from 50-some such waivers previously granted.

It was not so long ago that the State Department's Harlan Watson spoke at the 2003 Ninth Session of the Conference of the Parties to the UN Framework Convention on Climate Change on The Bush Administration's enthusiasm for state-level initiatives on climate policy:

I would like to highlight the efforts being made by State and local governments in the United States to address climate change. Geographically, the United States encompasses vast and diverse climatic zones representative of all major regions of the world -- polar, temperate, semi-tropical, and tropical -- with different heating, cooling, and transportation needs and with different energy endowments. Such diversity allows our State and local governments to act as laboratories where new and creative ideas and methods can be applied and shared with others and inform federal policy -- a truly bottom-up approach to addressing global climate change.

At the State level, 40 of our 50 States have prepared GHG inventories, 27 States have completed climate change action plans, and 8 States have adopted voluntary GHG emissions goals. In addition, 13 States have adopted "Renewable Portfolio Standards" requiring electricity generators to gradually increase the portion of electricity produced from renewable resources such as wind, biomass, geothermal, and solar energy. And, at the local level, more than 140 local governments participating in the Cities for Climate Protection Campaign are developing cost-effective GHG reduction plans, setting goals, and reducing GHG emissions

Yesterday, EPA's Steven Johnson explains why the Bush Administration is now opposed to state by state efforts to innovate:

"The Bush administration is moving forward with a clear national solution — not a confusing patchwork of state rules," Mr. Johnson told reporters on a conference call. "I believe this is a better approach than if individual states were to act alone."

Climate policy needs more not less opportunities to learn from implementation. The Bush Administration's inconsistent actions are not only ham-handed politics, but just bad policy, whatever one's views on climate change, energy policy, or partisan politics.

H/T DotEarth

Posted on December 20, 2007 02:06 AM View this article | Comments (1)
Posted to Author: Pielke Jr., R. | Energy Policy

December 17, 2007

Shellenberger on Bali

Over at the Breakthrough blog, Michael Shellenberger offers some straight talk on the outcome of the Bali meeting.

December 16, 2007

China's Growing Emissions

According to this paper by two researchers at the University of California carbon dioxide emissions in China are projected to grow between 11.05% and 13.19% per year for the period 2000-2010. What does this mean? I hope you are sitting down because you won’t believe this.

In 2006 China’s carbon dioxide emissions contained about 1.70 gigatons of carbon (GtC) (source). By 2010, at the growth rates projected by these researchers the annual emissions from China will be between 2.6 and 2.8 GtC. The growth in China's emissions from 2006-2010 is equivalent to adding the 2004 emissions of Japan, Germany, United Kingdom, Canada, and Australia to China's 2006 total (source). The emissions growth in China at these rates is like adding another Germany every year, or a UK and Australia together, to global emissions. The graph below illustrates the point.

Think about that.

China Emissions.png

Posted on December 16, 2007 05:44 PM View this article | Comments (0)
Posted to Author: Pielke Jr., R. | Climate Change | Energy Policy

December 14, 2007

Chris Green on Emissions Target Setting

Chris Green, an economist from McGill University (Canada), has written an op-ed for the Global and Mail explaining why he thinks that the setting of long-term emissions targets just kicks the can down the road. This is sure to be an unpopular opinion among many in the climate debate, but ultimately I think he is right. Here is an excerpt:

It is not difficult to set forth the outlines of a potentially effective climate policy. Unfortunately, what may be effective is not necessarily politically acceptable. It now seems that the main barrier to an effective climate policy is the obsession with emission targets — a legacy of the Kyoto Protocol. Emission targets stand in the way of concentrating on actions whose payoff is mainly beyond the targeted time frame. Worse, because of an effective effort by climate-change "campaigners" to portray the Kyoto Protocol as humankind's last best hope on climate change, emission targets have now taken on a life of their own, particularly in political arenas susceptible to grandstanding behaviour. The evidence is all around us.

The fundamental problem with mandated emission reduction targets is that they focus on ends rather than on the technological means of achieving those ends. Because targets are assessed only rarely in terms of what is doable but usually in terms of what pressure groups think ought to be done, target-based policies lack credibility in virtually the same proportion in which they are politically popular. The Conference of the Parties session in Bali will indicate whether there is a sufficient number of countries prepared to say that the target-setting emperor has no clothes, and are ready to put a moratorium on this failed approach to climate policy.

The op-ed is distilled from a longer piece from the magazine Policy Options, and a PDF of that essay can be found here. It is well worth a read regardless of your views on the climate issue.

December 13, 2007

Reality Check

From Alan Zarembo writing in the LA Times today, this dose of reality:

Here's a recipe to head off the worst effects of global warming:

1. Start with 30 new nuclear power plants around the world.

2. Add 17,0000 wind turbines, 400 biomass power plants, two hydroelectric dams the size of China's Three Gorges Dam, and 42 coal or natural gas power plants equipped with still-experimental systems to sequester their carbon dioxide emissions underground.

3. Build everything in 2013. Repeat every year until 2030.

latimes13dec07.gif

It's an intentionally implausible plan presented this week by the International Energy Agency to make a point: For all the talk about emissions reductions, the actual work is way beyond what the world can achieve.

As delegates from 190 countries gather here on the Indonesian island of Bali to negotiate a "road map" for the successor to the 1997 Kyoto Protocol on global warming, some experts are wondering whether the meeting has lost touch with the reality of tackling climate change.

So far, the thousands of delegates have been consumed by a debate over caps on emissions of greenhouse gases that are the primary cause of global warming.

The United States and China -- the two biggest carbon polluters, each accounting for about 20% of worldwide emissions -- have opposed any hard caps.

But while the debate continues, the most fundamental question of what it will take to achieve meaningful reductions has gone largely forgotten.

December 12, 2007

Fun With Carbon Accounting

Dieter Helm of Oxford has a very interesting paper (PDF) on trends in carbon dioxide emissions in the UK (via Climate Feedback) when they are measured from a consumption basis versus the production basis used under the Kyoto Protocol. Here is an excerpt from the paper:

On the UNFCCC basis, UK greenhouse gas emissions have fallen by 15% since 1990. In contrast, on a consumption basis, the illustrative outcome is a rise in emissions of 19% over the same period. This is a dramatic reversal of fortune. It merits an immediate, more detailed and more robust assessment. It suggests that the decline in greenhouse gas emissions from the UK economy may have been to a considerable degree an illusion. Trade may have displaced the UK’s greenhouse gas appetite elsewhere. . .

The UK’s record against the UNFCCC greenhouse gas indicator is impressive, achieving a fall in emissions between 1990 and 2005. It has already beaten its Kyoto target of 12.5% by 2008–12. Against its own domestic goal of a 20% CO2 reduction by 2010, progress has been
less impressive. The UK’s CO2 emissions have risen slightly recently, and last year lay only 5.3% below 1990 levels. This is despite the fact that the UK’s climate change policy programme focuses effort on tackling CO2.

All of the above figures were produced on a territorial accounting basis. When the account is extended to the Office for National Statistics’ residents’ basis, by including international transport and overseas activities, the picture looks worse. Emissions fell by only 11.9%, as shipping and international aviation boomed. Furthermore, airline passengers and firms from the UK consumed more greenhouse gases during their visits and activities abroad than overseas visitors and firms did in the UK, weakening the UK’s overall performance when these trade activities are included. The trend is an adverse one.

Yet, even this extended scope of measurement does not represent the true picture of the UK economy’s impact on the climate. To understand the UK’s true impact, the greenhouse gas accounts should be reported on a 'consumption basis'. On this basis, all greenhouse gases embodied in UK consumption are counted, and by adding greenhouse gases embedded in imports and subtracting greenhouse gases embedded in exports, the crude calculations presented here suggest that UK emissions have been rising steeply. Between 1990 and 2003 the crude calculation indicates a rise of 19%.

Posted on December 12, 2007 04:55 PM View this article | Comments (0)
Posted to Author: Pielke Jr., R. | Climate Change | Energy Policy

December 05, 2007

Lieberman-Warner

Not only was there an announcement from Bali, but S. 2191 went from the Senate Committee on Environment and Public Works to the full senate. That's a pretty big deal too. It's endorsed by a variety of environmental groups, including the Apollo Alliance, Defenders of Wildlife, Environmental Defense, League of Conservation Voters, National Environmental Trust, National Wildlife Federation, Natural Resources Defense Council, The Nature Conservancy, The Sierra Club, Union of Concerned Scientists and The Wilderness Society.

Who knows how it'll fare, but I thought it possibly worth commenting on this tired minority response from some guy in Oklahoma.

Yep. It'll cost money. Whether that'll deal a devastating blow to "American families, American jobs, and the American way of life" is harder to judge.

Say, just what is the "American way of life" anyway? For that matter, what are "American jobs"? I won't even ask about "American families." That one sure created a stir in the last election.

Anyone care to take a stab at a definition? Props if you can offer a coherent answer without begging the question.

November 26, 2007

It Will Take More than Holocaust Analogies

Andy Revkin reports on a spat between NASA's James Hansen and Kraig R. Naasz, the president of the National Mining Association. You can go read the details at Dot Earth. After you do that you might mull over the following factoids (emphasis added). . .

From the International Energy Association's 2007 World Energy Report (PDF):

In line with the spectacular growth of the past few years, coal sees the biggest increase in demand in absolute terms, jumping by 73% between 2005 and 2030 and pushing its share of total energy demand up from 25% to 28%. Most of the increase in coal use arises in China and India. . . Higher oil and gas prices are making coal more competitive as a fuel for baseload generation. China and India, which already account for 45% of world coal use, drive over four-fifths of the increase to 2030 in the Reference Scenario. In the OECD, coal use grows only very slowly, with most of the increase coming from the United States. In all regions, the outlook for coal use depends largely on relative fuel prices, government policies on fuel diversification, climate change and air pollution, and developments in clean coal technology in power generation. The widespread deployment of more efficient power-generation technology is expected to cut the amount of coal needed to generate a kWh of electricity, but boost the attraction of coal over other fuels, thereby leading to higher demand.

From some excellent reporting by the Christian Science Monitor:

In all, at least 37 nations [in Asia, Americas, EU, and elsewhere] plan to add coal-fired capacity in the next five years – up from the 26 nations that added capacity during the past five years. With Sri Lanka, Laos, and even oil-producing nations like Iran getting set to join the coal-power pack, the world faces the prospect five years from now of having 7,474 coal-fired power plants in 79 countries pumping out 9 billion tons of CO2 emissions annually – out of 31 billion tons from all sources in 2012.

One can understand why Stanford's David Victor offers a less-than-optimistic view of the issue, here is part of his comment posted at Dot Earth:

The reason coal matters so much is that it offers the best route for getting leverage on emissions–because coal is used mainly in large central generating stations that are managed by professionals and where economies of scale favor the installation of carbon storage, etc.

That means that simple-sounding solutions like shutting coal plants or passing moratoria are politically impractical and also probably will set back the cause. For example, some existing stations may offer cheaper routes for controlling emissions (such as through installation of post combustion capture) than building brand new units. We don’t know which routes will work, and until we know some more–which requires a much larger effort–it is hard to know what exactly to recommend.

Our group at Stanford has started tracking CCS projects, and what’s striking to us is that if you add up ALL the projects you get to an effort that is perhaps 1/100 of what is actually needed to halt emissions. The whole policy effort, so far, is Potemkin–it looks nice on the surface, but there’s little behind the facade. And to pin all that on coal isn’t right. The problem is us.

The reality is that energy from coal is here to stay. That David Victor sees coal plants as part of the solution to limiting greenhouse gas emissions and James Hansen does not illustrates how widely experts who agree on the need to limit emissions disagree on energy policy.

Posted on November 26, 2007 04:34 PM View this article | Comments (1)
Posted to Author: Pielke Jr., R. | Climate Change | Energy Policy

November 14, 2007

Not Ambitious Enough

In today’s New York Times, Thomas Friedman has a column lamenting the failure of politicians to enact a gasoline tax following 9/11. I am a strong supporter for a dramatically increased gasoline tax in the United States. The problem with Friedman’s proposed gasoline tax is that it is not ambitious enough.

Here are some data:

Sources:

U.S. gasoline prices
U.S. gasoline usage
U.S. GDP

On September 11, 2001 U.S. gasoline averaged $1.15 per gallon. By May 1, 2006 it was $2.90 per gallon. The difference of $1.75 per gallon is larger than the gasoline tax proposed by Friedman, and thus allows for a natural experiment on the effects on consumption.

US gasoline consumption in September, 2001 was 8.6 million barrels per day. In May, 2006 it was 9.3 million barrels per day. This does not suggest a strong relationship between price and consumption, although it is certainly possible to argue that consumption would have been higher with lower prices. Clearly, the $1.75 increase per gallon did not lead to reduced consumption.

One can look at the figures from the standpoint of the overall economy as well. In 2001 the US economy generated $3.22 of economic activity for every gallon of gasoline burned. In 2006 it generated $3.91 of economic activity for every gallon of gasoline burned. This does not suggest a strong relationship of gasoline use and economic growth. This is good news because it suggests that gasoline prices might be able to increase considerably without large negative economic effects.

One might argue that the $1.00 per gallon tax would be on top of the supply/demand fluctuations in price. But even gasoline at $4 or $5 dollars is unlikely to lead to dramatic changes in behavior or innovation.

Consider that a gasoline tax of $1/per gallon would have raised only about $3.4 billion in tax revenue in 2006, which is small in relation to overall U.S. incomes taxes, which in 2006 were more than $1 trillion (PDF). Thus it is very (!) misleading when Friedman quotes Philip Verleger in his column as saying, "We could have replaced the current payroll tax with a gasoline tax." Well, I suppose that if the gasoline tax was about $300/gallon under present levels of consumption then that statement would be accurate!

What does the literature say?

There is a very nice review paper on the elasticity of gasoline demand based on a wide range of studies by Graham and Glaister (2002)(PDF). This paper concludes:

There are differences between the short- and long-run elasticities of fuel consumption with respect to price. . . Therefore, it may be right to say that "it won’t make much difference" or "people will use their cars just the same", but only in the short run. The evidence is clear and remarkably consistent over a wide range of studies in many countries that in the long run there is a significant response, albeit a less than proportionate one. . .

So the effects of a gasoline tax are important and take place over the long term. However, the tax would have to be significant enough to generate significant responses, lest it be more symbolic than effective. I am not sure what that is in the United States, but I am sure that $1 per gallon is only a step in the right direction; it is not all that is needed by a longshot.

Both long- and short-term effects of gasoline prices on traffic levels tend to be less than their effects on the volume of fuel burned. . . Raising fuel prices will therefore be more effective in reducing the quantity of fuel used than in reducing the volume of traffic. . .

Anyone who has driven at rush hour in the UK where gasoline costs a lot more than the U.S. will be well aware of this reality. It is therefore misleading to suggest that a higher gasoline tax will reduce congestion, as some have sugges