Global Energy Security and Net Zero: �Why is it so difficult to reduce Greenhouse Gas Emissions?

Prof. Ross McKitrick

Department of Economics and Finance

University of Guelph

and

Senior Fellow, Fraser Institute

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31 years and counting…

• 1992 (Rio)

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• Kyoto (1997)

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• Paris (2015)

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Yet global CO2 emissions keep rising

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Spot the years the emission reduction treaties came into force

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Contrast

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• Other types of air pollution

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What makes CO2 so difficult?

1. Abatement options are very limited and costly

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• Emissions mix globally so unilateral action is useless – leakage problems

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• Carbon cycle is large and slow so potential benefits are small and far in the future

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• Warnings about imminent catastrophe do not resonate with public

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1. Abatement Options Limited

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• Unlike SO₂, CO, Particulates and VOCs there are no inexpensive abatement options

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• In particular there are no “scrubbers” that stop CO₂ release when fuel is burned
• Except: Carbon Capture and Storage

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• Only option is to cut fuel use
• This unavoidably cuts into real income
• We don’t get around this through energy efficiency mandates or EV subsidies

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2. Emissions mix globally

• Everyone’s responsible for a bit
• No one country can change total emissions
• Leads to leakage problems

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Carbon leakage��When one region cuts emissions and they just relocate to another region�

The Kyoto Protocol “imposed substantial costs on firms and consumers in committed countries, but the return of all these efforts – lower global carbon emissions – has been statistically indistinguishable from zero.”

Aichele & Felbermayr (2012) Journal of Environmental Economics and Management 63(3) https://doi.org/10.1016/j.jeem.2011.10.005 ;

3. Carbon cycle slow to adjust

• Full compliance with Kyoto or Paris would only slightly slow down the rate of accumulation of CO2 in the atmosphere

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• Year 2100 concentration would be reached in 2105 instead

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Effects of Kyoto Protocol

• If we assume full compliance

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Without

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Paris: Government Pledges

Like Kyoto, no noticeable effect

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Measuring benefits of abatement

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Costs of GW if there are no abatement policies

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Costs of GW if there

are abatement policies

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Not the

appropriate measure of the benefits of cutting CO2 emissions

Benefits of Kyoto/Paris

• Benefit = the discounted value of a slight delay in reaching CO2 doubling

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• Demands to “stop climate change” or “take action on the climate” aren’t meaningful since emission control policies would not stop it, merely change the timing by a small amount

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The key problem

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• Available policies are too small to have an effect, and too costly to implement
• Increasing stringency of the policies pushes up the costs faster than the benefits

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• Economists have long warned about mismatch between costs and benefits

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Mainstream Economic Analysis:��Impacts of climate change likely to be relatively small

• “I conclude that in the United States, and probably Japan, Western Europe, and other developed countries, the impact on economic output will be negligible and unlikely to be noticed.”
• Thomas Schelling 1992 Presidential Address to Amer. Econ. Assoc.

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• “For most economic sectors, the impact of climate change will be small relative to the impacts of other drivers. Changes in population, age, income, technology, relative prices, lifestyle, regulation, governance, and many other aspects of socioeconomic development will have an impact on the supply and demand of economic goods and services that is large relative to the impact of climate change.”
• IPCC (2013) 5th Assessment Report, Working Group II Ch 10.

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• [Optimal climate policy primarily involves adaptation rather than mitigation; attempt to prevent warming worse than doing nothing at all]
• William Nordhaus (2018) American Economic Journal: Economic Policy 10 (3)

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Not a popular stance

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• “Mainstream climate economics takes global warming seriously, but perplexingly concludes that the optimal economic policy is to almost do nothing about it …The contrast is striking. While climate science is sending out loud-and-clear messages that fossil-fuel disinvestment must start now… mainstream climate economics claims that overly ambitious climate targets will unnecessarily hurt the economy and immediate de-carbonization is too expensive. Most climate economists thus recommend humanity to just wait-and-see.”
• Storm, S. (2017)

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4. Warnings about imminent catastrophe don’t resonate

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• People understand natural weather variability

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• Politicians have squandered credibility with apocalyptic language

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• Climate reductionism pushed to absurd extremes

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Context: natural variability

• Montreal daytime highs 1881 - 2019

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Context: natural variability

• Montreal daytime highs 1881 - 2019

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UN Secretary-General

• Increasingly hysterical language

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1.5C Catastrophe threshold

Frequent warnings that we mustn’t cross this line

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But IPCC never said these things

• 2018 Special Report on 1.5°C warming merely pointed out:
• 2.0°C warming greater than 1.5°C warming
• If we want to prevent more than 1.5°C warming we need to take action soon

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• IPCC Reports do not use words like “crisis” or “catastrophe” or “emergency”

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SR1.5C Report Wording

• Risks to natural and human systems are expected to be lower at 1.5°C than at 2°C of global warming (high confidence). (SR1.5: 178)

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• The projected frequency and magnitude of floods and droughts in some regions are smaller under 1.5°C than under 2°C of warming (medium confidence). (SR1.5: 179)

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• Global warming of 2°C is expected to pose greater risks to urban areas than global warming of 1.5°C (medium confidence). (SR1.5: 180; emphasis in original)

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Some recent headlines

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Many slogans don’t match reality

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• Warming more than 1.5C = catastrophe

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• Rate of warming “worse than predicted”

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• Floods, droughts, wildfires all getting worse

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Example: President Obama, 2012

• “[w]hat we do know is the temperature around the globe is increasing faster than was predicted even ten years ago” (press conference, November 14 2012, reported in Washington Post, 2012)

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IPCC (2013): warming over past decade well below model predictions

• 111 out of 114 model runs predicted more warming than observed since late 1990s

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• Fyfe et al. (2013): models projected more than 4x the observed warming

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Today: 41 models, most warm too rapidly

• Surface:

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Today: 41 models, most warm too rapidly

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• Only NOAA’s STAR data set matched model avg
• But it was just revised downwards

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Extreme weather slogans

• E.g. Al Gore (Climate Reality Project) 2011:

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IPCC (2012): Floods aren’t increasing

• “In the United States and Canada during the 20th century and in the early 21st century, there is no compelling evidence for climate-driven changes in the magnitude or frequency of floods”

• “[recent research] does not show clear and widespread evidence of climate-driven observed changes in the magnitude or frequency of floods at the global level”

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IPCC (2012): Droughts aren’t increasing

• “recent droughts are not unprecedented, with severe ‘megadroughts’ reported in the paleoclimatic record for Europe, North America, and Australia … much more severe and longer droughts occurred in the past centuries with widespread ecological, political, and socioeconomic consequences.”

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• “The most severe droughts in the 20th century have occurred in the 1930s and 1950s, where the 1930s Dust Bowl was most intense and the 1950s drought most persistent.”

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IPCC AR6 (2021 Ch. 11 page 78) on droughts:

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“There are only two AR6 regions in which there is at least medium confidence that human-induced climate change has contributed to changes in meteorological droughts (Section 11.9)… South-western South America [and] Northern Europe... In other AR6 regions, there is inconclusive evidence in the attribution of long-term trends, but a human contribution to single meteorological events or subregional trends has been identified in some instances… “

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Example: Hurricanes & Tornadoes

• Typhoon Haiyan hit the Philippines in 2013

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• At UN Climate Conference in Warsaw, Philippine delegate said:
• “What my country is going through as a result of this extreme climate event is madness, the climate crisis is madness. We can stop this madness right here in Warsaw.”

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IPCC (2012): cyclones aren’t increasing

• “There have been no significant trends observed in global tropical cyclone frequency records, including over the present 40-year period of satellite observations”

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• “Accumulated cyclone energy… has been declining globally since reaching a high point in 2005, and is presently at a 40-year low point (Maue, 2009). The present period of quiescence, as well as the period of heightened activity leading up to the high point in 2005, does not clearly represent substantial departures from past variability”

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Too good to check

• Environment Minister Catherine McKenna, Oct 15 2018, House of Commons climate debate

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• “We have seen forest fires that are burning longer and brighter than ever. We have seen floods. We have seen droughts.”

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• Did any journalists check whether these claims were valid?

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Global forest fires

• European Space Agency: Global wildfire burn area declining since 2005

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Canada: fires & floods

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• Canadian National Forestry Database

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Canada: fires & floods

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Extreme Precipitation:

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Environment and Climate Change Canada Canada’s Changing Climate Report (2019, p. 119):

“the observational record [for Canada] has not yet shown evidence of consistent changes in short-duration precipitation extremes across the country.”

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IPCC 6^th Assessment Report WG1 Ch 11 p. 55:

“In Canada, there is a lack of detectable trends in observed annual maximum daily (or shorter duration) precipitation (Shephard et al., 2014; Mekis et al., 2015; Vincent et al., 2018).”

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What about all the studies showing massive potential damages?

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• Heavily reliant on outlier emission scenario called RCP8.5

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• Experts have called it out as misleading and unrealistic

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Emissions have long followed lowest forecast path

This pattern goes back decades

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Uncertainty about Costs of GHG Emissions

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Dayaratna et al.

• Simple change to IAMs:

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replace the model-based climate sensitivity parameter distribution to more recent empirically-based Lewis-Curry estimate

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Avg of DICE and FUND

• Avg SCC Estimate out to 2050 drops 40-80%

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Summary��why CO₂ is so hard to control

1. Abatement options are very limited and costly

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• Emissions mix globally so unilateral action is useless – leakage problems

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• Carbon cycle is large and slow so potential benefits are small and far in the future

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• Warnings about imminent catastrophe are overstated; people tuning them out

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Results:

• Public not prepared to incur the costs of Net Zero-type policies

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• Climate policy path will likely continue looking like what economists long recommended: adapt to changes until technology appears that can stop CO₂ emissions

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