Paris, climate and surrealism

27 07 2017

Speaker: Prof. Kevin Anderson, Professor of energy and climate change

Title: Paris, climate and surrealism: how numbers reveal an alternate reality

The Paris Agreement’s inclusion of “well below 2°C” and “pursue … 1.5°C” has catalysed fervent activity amongst many within the scientific community keen to understand what this more ambitious objective implies for mitigation. However, this activity has demonstrated little in the way of plurality of responses. Instead there remains an almost exclusive focus on how future ‘negative emissions technologies’ (NETs) may offer a beguiling and almost free “get out of jail card”.
This presentation argues that such a dominant focus reveals an endemic bias across much of the academic climate change community determined to voice a politically palatable framing of the mitigation landscape – almost regardless of scientific credibility. The inclusion of carbon budgets within the IPCC’s latest report reveals just how few years remain within which to meet even the “well below 2°C” objective.

Making optimistic assumptions on the rapid cessation of deforestation and uptake of carbon capture technologies on cement/steel production, sees a urgent need to accelerate the transformation of the energy system away from fossil fuels by the mid 2030s in the wealthier nations and 2050 globally. To put this in context, the national mitigation pledges submitted to Paris see an ongoing rise in emissions till 2030 and are not scheduled to undergo major review until 2023 – eight years, or 300 billion tonnes of CO2, after the Paris Agreement.

Despite the enormity and urgency of 1.5°C and “well below 2°C” mitigation challenge, the academic community has barely considered delivering deep and early reductions in emissions through the rapid penetration of existing end-use technologies and profound social change. At best it dismisses such options as too expensive compared to the discounted future costs of a technology that does not yet exist. At worst, it has simply been unprepared to countenance approaches that risk destabilising the political hegemony.

Ignoring such sensibilities, the presentation concludes with a draft vision of what an alternative mitigation agenda may comprise.

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Reading The News On America Should Scare Everyone, Every Day… But It Doesn’t

22 07 2017

Whilst this is Amero-centric, make no mistake, it also applies to Australia in bucket loads…….

Authored by Raul Ilargi Meijer via The Automatic Earth blog,

Reading the news on America should scare everyone, and every day, but it doesn’t. We’re immune, largely. Take this morning. The US Republican party can’t get its healthcare plan through the Senate. And they apparently don’t want to be seen working with the Democrats on a plan either. Or is that the other way around? You’d think if these people realize they were elected to represent the interests of their voters, they could get together and hammer out a single payer plan that is cheaper than anything they’ve managed so far. But they’re all in the pockets of so many sponsors and lobbyists they can’t really move anymore, or risk growing a conscience. Or a pair.

What we’re witnessing is the demise of the American political system, in real time. We just don’t know it. Actually, we’re witnessing the downfall of the entire western system. And it turns out the media are an integral part of that system. The reason we’re seeing it happen now is that although the narratives and memes emanating from both politics and the press point to economic recovery and a future full of hope and technological solutions to all our problems, people are not buying the memes anymore. And the people are right.

Tyler Durden ran a Credit Suisse graph overnight that should give everyone a heart attack, or something in that order. It shows that nobody’s buying stocks anymore, other than the companies who issue them. They use ultra-cheap leveraged loans to make it look like they’re doing fine. Instead of using the money/credit to invest in, well, anything, really. You can be a successful US/European company these days just by purchasing your own shares. How long for, you ask?

There Has Been Just One Buyer Of Stocks Since The Financial Crisis

 As CS’ strategist Andrew Garthwaite writes, “one of the major features of the US equity market since the low in 2009 is that the US corporate sector has bought 18% of market cap, while institutions have sold 7% of market cap.” What this means is that since the financial crisis, there has been only one buyer of stock: the companies themselves, who have engaged in the greatest debt-funded buyback spree in history.

 

 Why this rush by companies to buyback their own stock, and in the process artificially boost their Earning per Share? There is one very simple reason: as Reuters explained some time ago, “Stock buybacks enrich the bosses even when business sags.” And since bond investor are rushing over themselves to fund these buyback plans with “yielding” paper at a time when central banks have eliminated risk, who is to fault them.

More concerning than the unprecedented coordinated buybacks, however, is not only the relentless selling by institutions, but the persistent unwillingness by “households” to put any new money into the market which suggests that the financial crisis has left an entire generation of investors scarred with “crash” PTSD, and no matter what the market does, they will simply not put any further capital at risk.

So that’s your stock markets. Let’s call it bubble no.1. Another effect of ultra low rates has been the surge in housing bubbles across the western world and into China. But not everything looks as rosy as the voices claim who wish to insist there is no bubble in [inject favorite location] because of [inject rich Chinese]. You’d better get lots of those Chinese swimming in monopoly money over to your location, because your own younger people will not be buying. Says none other than the New York Fed.

Student Debt Is a Major Reason Millennials Aren’t Buying Homes

 College tuition hikes and the resulting increase in student debt burdens in recent years have caused a significant drop in homeownership among young Americans, according to new research by the Federal Reserve Bank of New York. The study is the first to quantify the impact of the recent and significant rise in college-related borrowing—student debt has doubled since 2009 to more than $1.4 trillion—on the decline in homeownership among Americans ages 28 to 30. The news has negative implications for local economies where debt loads have swelled and workers’ paychecks aren’t big enough to counter the impact. Homebuying typically leads to additional spending—on furniture, and gardening equipment, and repairs—so the drop is likely affecting the economy in other ways.

As much as 35% of the decline in young American homeownership from 2007 to 2015 is due to higher student debt loads, the researchers estimate. The study looked at all 28- to 30-year-olds, regardless of whether they pursued higher education, suggesting that the fall in homeownership among college-goers is likely even greater (close to half of young Americans never attend college). Had tuition stayed at 2001 levels, the New York Fed paper suggests, about 360,000 additional young Americans would’ve owned a home in 2015, bringing the total to roughly 2.9 million 28- to 30-year-old homeowners. The estimate doesn’t include younger or older millennials, who presumably have also been affected by rising tuition and greater student debt levels.

Young Americans -and Brits, Dutch etc.- get out of school with much higher debt levels than previous generations, but land in jobs that pay them much less. Ergo, at current price levels they can’t afford anything other than perhaps a tiny house. Which is fine in and of itself, but who’s going to buy the existent McMansions? Nobody but the Chinese. How many of them would you like to move in? And that’s not all. Another fine report from Lance Roberts, with more excellent graphs, puts the finger where it hurts, and then twists it around in the wound a bit more:

People Buy Payments –Not Houses- & Why Rates Can’t Rise

 Over the last 30-years, a big driver of home prices has been the unabated decline of interest rates. When declining interest rates were combined with lax lending standards – home prices soared off the chart. No money down, ultra low interest rates and easy qualification gave individuals the ability to buy much more home for their money. The problem, however, is shown below. There is a LIMIT to how much the monthly payment can consume of a families disposable personal income.

 

 In 1968 the average American family maintained a mortgage payment, as a percent of real disposable personal income (DPI), of about 7%. Back then, in order to buy a home, you were required to have skin in the game with a 20% down payment. Today, assuming that an individual puts down 20% for a house, their mortgage payment would consume more than 23% of real DPI. In reality, since many of the mortgages done over the last decade required little or no money down, that number is actually substantially higher. You get the point. With real disposable incomes stagnant, a rise in interest rates and inflation makes that 23% of the budget much harder to sustain.

 

 

In 1968 Americans paid 7% of their disposable income for a house. Today that’s 23%. That’s as scary as that first graph above on the stock markets. It’s hard to say where the eventual peak will be, but it should be clear that it can’t be too far off. And Yellen and Draghi and Carney are talking about raising those rates.

What Lance is warning for, as should be obvious, is that if rates would go up at this particular point in time, even a lot less people could afford a home. If you ask me, that would not be so bad, since they grossly overpay right now, they pay full-throttle bubble prices, but the effect could be monstrous. Because not only would a lot of people be left with a lot of mortgage debt, and we’d go through the whole jingle mail circus again, yada yada, but the economy’s main source of ‘money’ would come under great pressure.

Let’s not forget that by far most of our ‘money’ is created when private banks issue loans to their customers with nothing but thin air and keyboard strokes. Mortgages are the largest of these loans. Sink the housing industry and what do you think will happen to the money supply? And since inflation is money velocity x money supply, what would become of central banks’ inflation targets? May I make a bold suggestion? Get someone a lot smarter than Janet Yellen into the Fed, on the double. Or, alternatively, audit and close the whole house of shame.

We’ve had bubbles 1, 2 and 3. Stocks, student debt and housing. Which, it turns out, interact, and a lot.

An interaction that leads seamlessly to bubble 4: subprime car loans. Mind you, don’t stare too much at the size of the bubbles, of course stocks and housing are much bigger issues, but focus instead on how they work together. As for the subprime car loans, and the subprime used car loans, it’s the similarity to the subprime housing that stands out. Like we learned nothing. Like the US has no regulators at all.

Fears Mount Over a New US Subprime Boom – Cars

It’s classic subprime: hasty loans, rapid defaults, and, at times, outright fraud. Only this isn’t the U.S. housing market circa 2007. It’s the U.S. auto industry circa 2017. A decade after the mortgage debacle, the financial industry has embraced another type of subprime debt: auto loans. And, like last time, the risks are spreading as they’re bundled into securities for investors worldwide. Subprime car loans have been around for ages, and no one is suggesting they’ll unleash the next crisis.

 But since the Great Recession, business has exploded. In 2009, $2.5 billion of new subprime auto bonds were sold. In 2016, $26 billion were, topping average pre-crisis levels, according to Wells Fargo. Few things capture this phenomenon like the partnership between Fiat Chrysler and Banco Santander. [..] Santander recently vetted incomes on fewer than one out of every 10 loans packaged into $1 billion of bonds, according to Moody’s.

If it’s alright with you, we’ll deal with the other main bubble, no.5 if you will, another time. Yeah, that would be bonds. Sovereign, corporate, junk, you name it.

The 4 bubbles we’ve seen so far are more than enough to create a huge crisis in America. Don’t want to scare you too much all at once. Just you read the news again tomorrow. There’ll be more. And the US Senate is not going to do a thing about it. They’re too busy not getting enough votes for other things.





Our Aversion to Doom and Gloom Is Dooming Us

20 07 2017

Reproduced from Commondreams.

I worked for over 35 years in the environmental field, and one of the central debates I encountered was whether to “tell it like it is,” and risk spreading doom and gloom, or to focus on a more optimistic message, even when optimism wasn’t necessarily warranted.

The optimists nearly always won this debate. For the record, I was—and am—a doom and gloomer.  Actually, I like to think I’m a realist. I believe that understating the problems we face leads to understated—and inadequate responses.  I also believe that people, when dealt with honestly, have responded magnificently, and will do so again, if and when called. Witness World War II, for example, when Churchill told the Brits, “I have nothing to offer but blood, toil, tears, and sweat.” In those words, he helped ignite one of the most noble and dedicated periods of unity and resistance in all the annals of human endeavor.

Finally, I believe that the principles of risk management dictate that when the consequences of our actions —or our inactions—are pervasive, long lasting, irreversible and potentially devastating, we should assume worst-case outcomes.  That’s why people get health insurance; it’s why they purchase insurance for their homes; it’s why they get life insurance. No one assumes they’ll get sick, that their house will burn down, or that they’re about to die, but it makes sense to hedge against these events.  It’s why we build in huge margins of safety when we design bridges or airplanes. You can’t undo an airplane crash, or reverse a bridge failure.

And you can’t restore a livable climate once it’s been compromised.  Not in anything other than geologic timeframes.

Yet we routinely understate the threat that climate change poses, and reject attempts to characterize the full extent of the potential for catastrophe it poses. And it’s killing us.

David Wallace-Wells’ recent article in the New York magazine, The Uninhabitable Earth, is a case in point.  It was an attempt to describe the worst-case scenario for climate change.  Here’s the opening sentences to give you an idea of what Mr. Wallace-Wells had to say:

It is, I promise, worse than you think. If your anxiety about global warming is dominated by fears of sea-level rise, you are barely scratching the surface of what terrors are possible, even within the lifetime of a teenager today. 

Predictably, a large part of the scientific community reacted with hostility, and environmentalists were essentially silent. For example, Climate Feedback published a critique of Wallace-Well’s article by sixteen climate scientists, leading with Michael Mann, originator of the famous hockey stick, which graphically showed how rapidly the Earth was warming. Here’s part of what Dr. Mann had to say:

The evidence that climate change is a serious problem that we must contend with now, is overwhelming on its own. There is no need to overstate the evidence, particularly when it feeds a paralyzing narrative of doom and hopelessness.

The last part of Dr. Mann’s statement may explain the real reason the environmental and scientific communities reacted so hostilely to Wallace-Well’s article, and why they generally avoid gloom and doom, even when the news is gloomy—the notion that presenting information that details just how bad climate change could be, leads to “paralysis.”

This, together with scientists’ tendency to stick to the most defensible positions and the scenarios that are accepted by the mainstream—what climate scientist James Hansen calls dangerous scientific reticence—probably explain why the scientific community has tended to understate the threat of climate change, although few would describe Dr. Mann as reticent.

And it should be noted that Mr. Wallace-Well’s did overstate some of the science. For example, given out current understanding of methane and carbon releases from permafrost, it appears as though it would take much longer to play out than Wallace-Wells suggested, although it likely would add as much as 2°C to projected warming by 2100. But for the most part, he simply took worst-case forecasts and used them. As Dr. Benjamin Horton—one of the scientists commenting on the Wallace-Wells article put it, “Most statements in the article are based on peer-reviewed literature.”

One of the reason worst-case projections seem so dire, is that the scientific community—and especially the IPCC—has been loath to use them. For the record, ex-ante analysis of previous forecasts with actual changes show a trend that is nearer to—or worse than—the worst-case forecasts than they are to the mid-range.

The article also forecast some of the social, demographic, and security consequences of climate change that can’t be scientifically verified, but which comport with projections made by our own national security experts.

For example, in this years’ Worldwide Threat Assessment of the US Intelligence Community, climate change was identified as a “threat multiplier” and Dan Coats, Director of National Intelligence, said in testimony presented to the Senate Select Committee on Intelligence in May of this year:

Climate change influences the entire geostrategic landscape. In that sense, one could  walk through the entire threat assessment report and identify ways in which climate  change will intersect with nearly every risk identified, and in most cases, make them worse.

Director Coats specifically highlighted health security, terrorism and nuclear proliferation as threats that climate change would exacerbate. This is coming from the Trump administration, which has been censoring climate-related information coming out of NOAA and EPA.  It’s a measure of how seriously the national security community takes the threat of climate change that they fought to keep the issue above the political fray.

Yet here again, the scientific community took issue with these claims, because they were conjecture.  Never mind that those whose job it is to assess these kinds of risks found the forecasts likely and actionable. Scientists want data and the certainty it brings, not extrapolation.

So what’s the gap between future worst-case and the more typically used mid-range projections the media and scientists favor?  It’s huge, and consequential.  I’ve pointed out some of the risky—if not absurd—assumptions  underlying the Paris Agreement in the past, but let’s briefly outline some numbers that highlight the difference between what’s typically discussed in the media, with projections based on worst-case—but entirely plausible—forecasts.

After Paris, there was a lot of attention paid to two targets: a limit of less than 2°C warming, and a more aggressive limit of no more than 1.5°C warming.  What was less well known and discussed was the fact that the Agreement would have only limited warming to 3.5°C by 2100, using the IPCC’s somewhat optimistic assumptions.

What is virtually unknown by most of the public and undiscussed by scientists and the media is that even before the US dropped out of the Treaty, the worst-case temperature increase under the Treaty could have been nearly twice that.

Here’s why.

As noted, the 3.5°C figure had a number of conservative assumptions built into it, including the fact that there is a 34 percent chance that warming will exceed that, and the idea that we could pass on the problem to our children and their children by assuming that they would create an as yet unknown technology that would extract massive amounts of carbon from the atmosphere in a cost-effective way, and safely and permanently sequester it, thus allowing us to exceed the targets for a limited amount of time.

But the fact is, some projections found that temperature increase resulting from meeting the Paris targets would exceed 4°C by 2100, even if we continued to make modest progress after meeting them – something the Treaty doesn’t require. The IPCC forecasts also ignored feedbacks, and research shows that just 3 of these will add another 2.5°C of warming by 2100, bringing the total to more than 6.5°C (or nearly 12°F). At this point, we’re talking about trying to live on an essentially alien planet.

Finally, there’s evidence that the Earth’s natural sinks are being compromised by the warming that’s happened so far, and this means that more of what we emit will remain in the atmosphere, causing it to warm much more than the IPCC models have forecasted. This could (not would) make Wallace-Well’s thesis not only plausible, but likely.

But rather than discussing these entirely plausible forecasts, the media, environmentalists and too many scientists, would rather focus on a more optimistic message, and avoid “doom and gloom.”

What they’re actually doing is tantamount to playing Russian Roulette with our children’s future with two bullets in the chamber. Yes, the odds are that it won’t go off, but is this the kind of risk we should be taking with our progeny’s future?

There is something paternalistic and elitist about this desire to spare the poor ignorant masses the gory details.  It is condescending at best, self-defeating at worst.  After all, if the full nature of the challenge we face is not known, we cannot expect people take the measures needed to meet it.

I believe now, and I have always believed, that humans are possessed with an inherent wisdom, and that, given the right information, they will make the right choices.

As an aside, Trump is now President because the Democrats followed the elitist and paternalistic path of not trusting the people – that and their decision to put corporate interests above the interests of citizens.

Watching Sanders stump against the Republican’s immoral tax cut for the rich disguised as a health care bill, shows the power of a little honest doom and gloom.

We could use a lot more of it across the political spectrum.

John Atcheson

John Atcheson is author of the novel, A Being Darkly Wise, and he has just completed a book on the 2016 elections titled, WTF, America? How the US Went Off the Rails and How to Get It Back on Track. It is available in hardcover now, and the ebook will be available shortly. Follow him on Twitter:@john_atcheson





How an obscure Austrian philosopher saw through our empty rhetoric about ‘sustainability’

5 07 2017

Hot Mess

Marc Hudson, University of Manchester

“Sustainability” is, ironically, a growth industry. Ever since the term “sustainable development” burst onto the scene in 1987 with the release of Our Common Future (also known as the Brundtland report), there has been a dizzying increase in rhetoric about humanity’s relationship with our planet’s resources. Glossy reports – often featuring blonde children in front of solar panels or wind turbines – abound, and are slapped down on desks as proof of responsibility and stewardship.

Every few years a new term is thrown into the mix – usually preceded by adjectives like “participatory” or “community-led”. The fashionability of “resilience” as a mot du jour seems to have peaked, while more recently the “circular economy” has become the trendy term to put on grant applications, conference notices and journal special editions. Over time journals are established, careers are built, and library shelves groan.

Meanwhile, the planetary “overshoot”, to borrow the title of a terrifying 1980 book, goes on – exemplified by rising concentrations of atmospheric carbon dioxide, warmer oceans, Arctic melting, and other signs of the times.

With all this ink being spilled (or, more sustainably, electrons being pressed into service), is there anything new to say about sustainability? My colleagues and I think so.

Three of us (lead author Ulrike Ehgartner,
second author Patrick Gould
and myself) recently published an article called “On the obsolescence of human beings in sustainable development”.

In it we explore the big questions of sustainability, drawing on some of the work of an unjustly obscure Austrian political philosopher called Gunther Anders.

Who was Günther Anders?

He was born Günther Siegmund Stern in 1902. While he was working as a journalist in Berlin, an editor wanted to reduce the number of Jewish-sounding bylines. Stern plumped for “Anders” (meaning “other” or “different”) and used that nom de plume for the rest of his life.

Anders knew lots of the big philosophical names of the day. He studied under Edmund Husserl and Martin Heidegger. He was briefly married to Hannah Arendt, and Walter Benjamin was a cousin.

But despite his stellar list of friends and family, Anders himself was not well known. Harold Marcuse points out that the name “Stern” was pretty apt, writing:

His unsparingly critical pessimism may explain why his pathbreaking works have seldom sparked sustained public discussion.

While Hiroshima and the nuclear threat were the most obvious influences on Anders’ writing, he was also crucially influenced by the events at Auschwitz, the Vietnam War, and his periods in exile in France and the United States. But why should we care, and how can his ideas be applied to modern-day ideas about sustainability?

Space precludes a blow-by-blow account of what my colleagues and I wrote, but two ideas are worth exploring: the “Promethean gap” and “apocalyptic blindness”.

Anders suggested that the societal changes wrought by the industrial age – chief among them the division of labour – opened a gap between individuals’ capability to produce machines, and their capability to imagine and deal with the consequences.

So, riffing on the Greek myth of Prometheus (the chap who stole fire from Mount Olympus and gave it to humans), Anders proposed the existence of a “Promethean gap” which manifests in academic and scientific thinking and leads to the extensive trivialisation of societal issues.

The second idea is that of “apocalyptic blindness” – which is, according to Anders, the mindset of humans in the Age of the Third Industrial Revolution. This, as we write in our paper:

…determines a notion of time and future that renders human beings incapable of facing the possibility of a bad end to their history. The belief in progress, persistently ingrained since the Industrial Revolution, causes the incapability of humans to understand that their existence is threatened, and that this could lead to the end of their history.

Put simply, we don’t want to look an apocalypse in the eye, even if it’s heading straight towards us.

The climate connection

“So what?” you might ask. Why listen to yet another obscure philosopher railing about technology, in the vein of Lewis Mumford and Jacques Ellul? But I think a passing knowledge of Anders and his work reminds us of several important things.

This is nothing new. Recently, the very notion of ‘progress’ has come under renewed assault, with books questioning our assumptions about it. This is not new of course – in a 1967 short story collection about life at the United Nations, Shirley Hazzard had written:

About this development process there appeared to be no half-measures: once a country had admitted its backwardness, it could hope for no quarter in the matter of improvement. It could not accept a box of pills without accepting, in principle, an atomic reactor. Progress was a draught that must be drained to the last bitter drop.

The time – if ever there was one – for tinkering around the edges is over. We need to take stronger action than simply pursuing our feelgood preoccupation with sustainability.

This begs the question of who is supposed to shift us from the current course (or rather, multiple collision courses. That’s a difficult one to answer.

The hope that techno-fixes (including 100% renewable energy) will sort out our problems is a dangerous delusion (please note, I’m not against 100% renewables – I’m just saying that green energy is “necessary but not sufficient” for repairing the planet).

Similarly, the “circular economy” has a rather circular feeling to it – in the sense that we’ve seen all this before. It seems (to me anyway) to be the last gasp of the “ecological modernist” belief that with a bit more efficiency, everything can simply keep on progressing.

The ConversationOur problems go far deeper. We are going to need a rapid and fundamental shift in our values, habits, behaviours, and outlooks. Put in Anders’ terms, we need to stop being blind to the possibility of apocalypse. But then again, people have been saying that for a century or more.

Marc Hudson, PhD Candidate, Sustainable Consumption Institute, University of Manchester

This article was originally published on The Conversation. Read the original article.