Category Archives: Coal

Book Review: The Carbon Crunch

The Carbon Crunch: How We’re Getting Climate Change Wrong—and How to Fix It, by Dieter Helm, Yale University Press 

“If the future of our climate rests on the ethical outlook of Vladimir Putin and the emerging Chinese leadership of Xi Jinping and Li Keqiang, then there can be little grounds for optimism.” 

Dieter Helm has met the enemy, and he is coal. The rap-sheet against coal is long, of course, and starts with mass murder: the thousands of coal miners who die in China every year, gruesomely, in explosions or of asphyxiation, the thousands more in other countries who die similarly, the tens of thousands of miners whose lives are ended prematurely by coal dust. Then there are the hundreds upon hundreds of thousands of miners who have died in coal’s bloody two-century rampage, a quarter of a million in the UK alone, to say nothing of the millions of civilians even now in Beijing and Ulan Bator whose lungs wheeze and breath rasps from sooty, sulfuric smog. But unchecked coal, abetted by its lesser accomplices oil and gas, has yet more murderous plans in store: ruinous climate change.

Coal these days is mostly about China, whose share of current world coal-burn is close to half, which is adding electricity capacity equivalent to the entire UK grid every year, most of it still coal, and which plans to add coal capacity equivalent to Europe’s total coal capacity this decade. Then there’s India: between the two of them, Helm claims, they are adding three coal plants a week. The World Resources Institute’s Global Coal Risk Assessment report lists c1,200 coal-fired power stations planned globally, three-quarters in China and India, with total capacity of c1,400GW, about seventy times Europe’s solar capacity.

Then beyond coal and China, there’s a wall of new energy demand that will be stimulated by economic growth and population growth: as Africa’s population doubles over the coming couple of decades, it is far from immediately obvious that the main energy sources of the newborn will be carbon-neutral windmills and solar panels. Try severing oil subsidies in Nigeria and you’ll be in for a nasty surprise from the Lagos street.

(All of this renders Fukushima the silly little storm in a nuclear teacup that it was.)

You might then expect the enlightened leaders of our Western and Eastern democracies to be eagerly discussing—and acting on—the real threats of coal, China (and coal in China), and economic and population growth, but instead we are led a dance of denuclearization in Japan and Germany and fobbed off with tumultuously expensive turbines in the Thames estuary and photovoltaic panels in unsunny Potsdam, which will have negligible anti-carbon impact. Helm caustically asks, “What is the question to which offshore wind and rooftop solar is supposed to be the answer? It can’t be global climate change.”

As Helm surveys the two decades of utter failure since Rio in 1992 to seal a binding international agreement on emissions and the dismal but absolutely certain prospect that nothing will be done this decade, the reader is treated time and again to the swooshing of the author’s word-sword scything into the comfy shibboleths of all concerned. Wind? Crippled by its miserable load factor, the need for “Goldilocks wind”—not too strong, not too weak, and not too gusty—the requirement for an entire parallel generation system for those nasty no-wind days, and the zero-marginal cost problem, which forces all other competing power suppliers off the grid, to name but a few. Biomass and biofuels? Leaky carbon loop. Corn ethanol for E85? Needs more acres of corn than there is farmland in the US. Nuclear? Shale gas has “pulled the economic rug from under nuclear’s feet,” with even the risk, waste, and proliferation issues overshadowed by the wonky economics of new nuclear, whose capital intensivity renders it hypersensitive to the cost of capital and needy for long-term contracts, bringing immense political risk. Energy efficiency? So sorry, just leads to increased demand via the substitution effect—a drop in the price always results in an increase in demand (the Jevons Paradox)—and the income effect, whereby income saved on energy bills is spent on stuff, and the production of such stuff naturally involves energy consumption.

Some fondly hope that the world will run out of fossil fuels before they cook us all. Not a chance, says Helm. Peak oil? Perhaps, but new finds, unconventional, offshore, the Arctic, and technology that wrings more out of existing wells will keep the tail fat. Doesn’t matter much, anyway, because of the shale gas revolution, unconventional gas in the shape of coal-bed methane and tight gas, and our old friend, super-abundant coal, supplies of which are ample enough to get us to the next century, with “the embedded carbon in that coal … sufficient to bring about catastrophic climate change.”

Why have two decades of international talk-fests on climate change yielded next to nothing? Because carbon targets are “a classic case of free-rider incentives” and climate change negotiations are a textbook real-world instance of the prisoner’s dilemma from game theory, in which betrayal is always more advantageous than cooperation—except that with climate change negotiations, the true prisoners (unborn future victims of climate change) aren’t even in the room and the ultimate penalty (the rise in temperature) is unknown, rendering betrayal even more likely than cooperation. “The realistic conclusion,” Helm sighs, “is that there is going to be no legally binding, international, and enforceable, deal for at least a decade, and possibly never.”

So what, as Lenin asked, is to be done? Helm offers a three-tined proposal: impose carbon taxes, in particular carbon border taxes, to properly price the negative externality of carbon and stop “carbon offshoring”, something at which the EU has excelled; dash for gas as a transitional solution, the least-regret way of swiftly cutting carbon; and the Hail Mary of investment in R&D into next-generation no-carbon technologies. Of these, a dash-for-gas seems most achievable but no ultimate panacea; carbon border taxes, while not, Helm insists, protectionist, are unlikely to be perceived that way by noisome free-riding polluters; and hopes for next-gen tech sees Helm at his most rosy-tinted—“my email inbox is full of excited reports of the latest ‘breakthrough’”—and a tad too harsh on current renewables, as opposed to future, pie-in-the-sky ones.   

Despite the inability of shilly-shallying humanity to halt the march of its beloved carbon in its tracks and the exceptional “wickedness” of the climate change conundrum, Helm concludes with the declaration that he is an optimist (do publishers insert a Mandatory Optimistic Conclusion Clause into authors’ contracts these days?Ed). All—all!—that needs to happen is for politicians to stop lying to their electorates that we can waltz effortlessly and painlessly into a carbon-free future: “the cost of the decarbonization of entire economies is likely to be very high, and it is going to involve sacrifices,” as “decarbonizing requires the coordinated replacement of almost all of the capital stock—of the world.” The pain of investment in that from savings is bound to mean less present consumption. Consumers, in their turn, “must … be willing to vote for politicians who will force them to pay.” All that, though, to purloin and amplify one of the author’s favorite expressions, is going to be a very big ask.