I write and read about the climate every day. Yet, even after years of tracking the complex cast of climate issues, every now and then my perspective is dramatically re-booted by what I think of as a ‘cathartic climate message’. It happens when a remarkable mind can yank your mind’s eye back up to the highest level of concern for the planetary risk posed by carbon pollution. For many people—myself included—An Inconvenient Truth did just this, synthesizing vast frontiers of information into a single, lucid, alarming message that sparked a fundamental awakenings.
In his world-view, poverty, hunger, disease, and environmental degradation are not merely painful dynamics happening far away, they are solvable problems with knowable causes and testable solutions. Accordingly, Sachs has not been shy to role up his sleeves, and apply dramatic economic medicine on a large scale, and not always successfully.
Sachs’ blend of pragmatism and penetrating intelligence has won him influence across the globe, from the U.N. to the White House. At Columbia, Sachs is the nodal center of much of the university’s work on international economics, public health and climate. He is head of the school’s Earth Institute, as well as the Quetelet Professor of Sustainable Development at Columbia’s School of International and Public Affairs and a Professor of Health Policy and Management at Columbia’s School of Public Health.
Accordingly, Sachs has strong convictions about the failure of U.S. policy to deal with carbon pollution, and accelerate carbon capture and renewables. Though Sachs was speaking roughly a month before the recent U.S. presidential elections, he was highly critical of cap-and-trade policy proposals. Though palpably frustrated with federal climate policy, Sachs publicly supported President Obama and has lobbied the White House to impose a carbon tax.
Amidst post-election jockeying to overhaul the U.S. tax code, Sachs’s take on carbon taxes looks prescient. Immediately following the election, conservative Washington think tanks have been exploring the impacts of a carbon tax with unprecedented seriousness. As Keith Johnson observes in The Wall Street Journal:
Sachs is confident a carbon tax could be deployed—and, importantly, sold to the public—by back-loading the tax so that it scales gradually. By using revenues to subsidize renewables and by giving investors a clear signal about future carbon costs, Sachs argues a tax will be more effective than cap-and-trade at steering investment towards low carbon technologies such as CCS.
Sachs spoke for an hour, without notes, reeling off reams of detailed economic and climate data from memory. However sharp his views, they offer an invaluable reference for why work on low-carbon technologies must continue, and quite possibly useful advice to help shape a future carbon policy. After his speech, he was interviewed by Climate Week, the video of which is below.
Following, find a lightly-abridged transcript of Sachs’s presentation to Climate Week.
Climate change is here, now
Thank you.
I’m pleased to be here and to know this group is grappling with these complicated topics. There are no known answers to this problem yet, so I could just sit down. [laughter]
Climate change is certainly the most complicated challenge that humanity has ever had to take on because the problems go to the core of our economic system. Energy is the most important sector of the modern economy.
And yet we have grown up for 200 years on a fossil fuel-based economy. So far, that has been a great thing for the world. Except now, it could ruin the world. We don’t have a clear pathway out of this and unfortunately time is short. We have already filled the atmosphere with greenhouse gases to a level of dangerous anthropogenic interference in the climate system.
In other words, the urgency of climate change is not as we first spoke about it 20 years ago, as a threat to our children and our children’s children. Rather, it is here now. We’ve entered what the geologists call the Age of the Anthropocene, meaning the period in Earth’s history when a single species—homo sapiens—has major Earth dynamics under our strong, and not so beneficial, influence.
Greenhouse gas emissions have already risen to a level that, in past history of the world, coincided with ocean levels many meters higher than they are now. This shows that we’ve already reached a level of human-induced change that, if it now unfolds over decades or perhaps centuries with all of the feedbacks included, we’ve already fundamentally changed the planet.
We’ve already emitted enough carbon dioxide to reduce the pH of the ocean by 0.1 units and we’re on a path to reduce the pH by about 0.4 units perhaps by mid-century. This could destroy a tremendous amount of the marine life around carbonate-needing species. Even aside from anticipated changes to the atmosphere, ocean acidification is coming from CO2 dissolving in the ocean surface and affecting the carbonate balance, the buffering function of the ocean. This dynamic, on its own, is enough to do tremendous harm.
Climate arithmetic
The point I want to make is that we’re already in the middle of dramatic change. We have not yet succeeded mentally, we have not yet succeeded technologically, and we certainly have not yet succeeded politically in finding a way forward.
The arithmetic is not all that complicated. It’s the solutions that are complicated.
The arithmetic is that the world economy is now amounts to $70 trillion per year. That’s seven billion people, on average, producing $10,000 per person in common units of purchasing power. We use about 200 kilograms of oil-equivalent energy for each $1,000 of GNP globally. It’s not so different across all scales of poor to rich countries actually, because energy scales with the level of production more or less proportionately.
For each kilogram of oil-equivalent energy unit, we emit about 2.4 kilograms of CO2. That’s a measure of the carbon intensity of our energy. If you multiply our energy use–the roughly 200 kilograms of oil-equivalent energy per $1,000 of output—by the roughly 2.4 kilograms of CO2 per kilogram of oil-equivalent energy, you see that we use about 0.46 kg of oil equivalent energy per dollar of GNP and emit about 460 kilograms of CO2 for every $1,000 of income.
Multiply that factor by global GDP, or $70 trillion, and that turns out to be about 33 billion tons of CO2 that we emit per year. Given the holding capacity of the atmosphere, that rate of emissions is raising the CO2 concentration in the atmosphere by about 2.5 parts per million per year.
The result is fairly simple math. We went from about 280 parts per million in the pre-industrial era to about 395 parts per million now. We’re on a path of increasing that number by roughly 2.5 parts per million every year.
How dangerous, at what level?
Now, what level is dangerous? It depends who you ask.
I regard my colleague [at Columbia University], Jim Hansen, as the premier climate scientist in the United States. He has taken the most flak from climate skeptics and that’s a good indication that he’s the most important and the most accurate of all the climate scientists. Twenty-four years ago Hansen told the U.S. Congress for the first time what our planet would be like if we went on with business as usual for another quarter century. It’s a quarter century later now, and it’s clear, he nailed this prediction almost to a decimal point.
Ask Hansen what is a dangerous level CO2 accumulation, and he’ll tell you that we passed the safe level by about 45 parts per million. He puts the threshold back at about 350 parts per million. Every time in Earth’s history when we’ve been above that threshold, ocean levels have been several meters higher.
So why aren’t they higher now? They’re haven’t risen yet because there are feedbacks that take time. For example, given the CO2 that we’ve emitted so far, the Earth’s temperature has warmed by about 0.8°C from the recent historical average. If we allow even the relatively short feedbacks to accumulate further to what we’ve already done—not adding any additional CO2, just including emissions to date—we’re going to have about twice that amount in warming.
In other words, we’ve already built in planetary warming of about 1.6°C, but we’ve observed only about half of that so far because the ocean takes time to warm up. It’s a big bathtub. It has a tremendous heat capacity. It’s warming, but it takes time.
That only accounts for changes to date, however. As Hansen points out, we need to factor in longer-term feedbacks: the loss of polar ice, changing the albedo of the Earth’s surface; the possible degassing of CO2 from deep oceans; methane release from permafrost; and others. These happen in highly non-linear ways.
Taking into account these effects as well, and we’re talking about a massive change of the planet, a massive change of sea level, a massive change of ocean chemistry, and a massive loss of species diversity.
Denial has real costs
We tell ourselves, “It’s okay. We have time. Maybe we’ll get to 450. That’s okay. What’s a couple degrees Centigrade among friends?”
In this country, we have our leading business newspaper, The Wall Street Journal, propounding these sorts of myths every day in its editorials, with a directly antiscientific propaganda. At the same time, it’s a wonderful newspaper—it’s got great news stories. But its opinion pages are extremely damaging because we’re already into the midst of massive climate disruption.
For example, this year, we had our 12 warmest months in U.S. history, spanning from July 2011 through to July 2012. In fact, July 2012 has turned out to be the single warmest month recorded in U.S. history.
We’ve had the worst drought in modern history, which has done great damage to the corn crop. Food prices are soaring.
We’ve had a presidential campaign where this issue has barely been mentioned—perhaps in one speech, in one paragraph. We have willful neglect because of the power of the lobbies. Politicians’ main job is to raise money to run advertisements and that costs a lot of money and the oil companies have a lot of money.
So here we are in the middle of this disaster and we can’t even talk about it. Now if we could talk about it we’d find out, “God, this is harsh. What are we going to do?”
The fact of the matter is that this is not in U.S. hands, even though the U.S. remains the largest economy, at least for a few more years. China may overtake the United States by 2017 or 2018 in total purchasing power.
In total carbon emissions, China has already overtaken the United States. China is by far the largest emitter and its emissions will continue to rise dramatically because—even with all of the innovative, renewable energy coming on line there, as well as all of the nuclear plants it is building—China is also increasing massively its use of coal. China is a coal-rich country, and what it can’t get domestically it’s importing from Australia.
The developing countries as a whole are now in the driver’s seat of the world climate in the future. They ask:
Why should we do anything? The most powerful country in the world—the United States, the richest country, the one with the highest per capita emissions of any major economy—won’t do anything. Why should we do anything? We need to catch up. We’re still poor. We’re still only one-fifth the per capita income of the United States. Why look to us? We just happen to have a lot of people.
They have a point. Except that this kind of relentless prisoner’s dilemma logic—“You first. No, you first. Thank you, no. I’ll do it after you”—is going to wreck the planet.
Destabilizing Africa
Before I turn to a couple of the possible solutions, I should say that the impacts are not just things like the heat wave in Europe, which took many lives, or the crop failures here in the U.S. this year.
There is also devastation occurring in drier, poorer parts of the world, especially in the horn of Africa and the Sahel [a region spanning the northern third of the African continent, where desert transitions into savannah].
Nobody knows for sure but the evidence seems to be that the warming of the Indian Ocean has pulled the rainfall off the coast of East Africa into the Indian Ocean. It’s led to a significant drying of what is already one of the driest places in the world: Ethiopia, Somalia, northern Uganda, northern Kenya and that area.
There have been horrendous droughts in recent years. That’s contributed to lots of violence, lots of extremism, and Al Qaeda. Then the drone missiles fly and we’re into a kind of a mind-boggling spiral of places in the world becoming almost uninhabitable. Instead of working on their resiliency, digging bore wells and helping with agriculture, instead we see war taking over.
In West Africa it’s a similar story, albeit with a different underlying mechanism. The Sahel has also faced a massive drought this year. We have already lost one country to collapse. Mali experienced tremendous violence in the form of coup in the south and an insurrection in the north.
If there’s a message from these cases, it’s this: Don’t be complacent. Don’t think we’re going to work it all out. Don’t expect that we’re going to learn, or that everything will be fine, or that we’ll get our act together.
Our capacity to wreck things is very high. The world’s economy keeps growing, there’s a lot of fossil fuel, and we’re very good at finding new ways to dig it up and burn it. We have the hydrofracking boom right now, as well as oil sands and oil shale. Anything we can find to burn, we will burn.
If we do that we will completely wreck the planet. And we’re already well advanced in doing that.
So that’s the problem. Now what’s the solution?
Low carbon technologies: CCS and renewables
The solution is we need alternatives. We have lots of candidates. We need to de-carbonize the global energy system.
By 2050, today’s world economy of $70 trillion should be maybe $200 trillion, if poor countries grow successfully. They will need a tremendous amount of energy. Even if we’re highly energy-efficient, the need for primary energy will grow tremendously.
To grow, we must turn to low-carbon energy. There are basically two ways to do that. One is to use primary energy sources that are not coal, oil, gas or things like it. That could be renewables, wind, solar, or geothermal. It could be nuclear.
The other alternative is to use those sorts of fossil fuels but to clean up after ourselves using carbon capture and sequestration, or CCS.
There are two logical chains of carbon capture and sequestration. One is to capture the CO2 as you burn it, at power plants, and sequester it safely geologically. The other, which one of my colleagues is working very hard to do, is to try to capture CO2 directly from the air. That’s more expensive because you have a diffuse source of CO2: it’s only 395 parts per million molecules in the atmosphere. If this can be done, it has an advantage because then you don’t need pipelines to transport it. Also, you can put the collectors in places best suited to geologically sequester it directly.
There is nothing wrong with fossil fuels. This is not a moral question, except for the CO2 issue. Using fossil fuels would be great—it’s gotten us a long way in the world, except it’s dangerous if we don’t clean up.
CCS is an extremely important potential technology for doing this. I think the overall logic of what to do is fairly clear. The overall logic is to clean up our power grid and convert our internal combustion to some form of electricity because cars can’t capture their own CO2 out of their exhaust. If we want to handle the roughly 25 percent of CO2 that’s emitted by our vehicles, the transport sector has to use a low-carbon power source. And that can be electrification.
The basic path of what we is this: We must move from a fossil fuel-emitting electric power sector and internal combustion-driven transportation sector to an electric power sector that is essentially carbon free and a transportation that is fuelled by carbon-free electric power sector.
Tipping the balance towards carbon free power
We’re not getting there right now because it requires extra resources to get there. You need to tip the balance to get moving in the right direction go by making market signals that us in that direction rather than in the current direction.
Right now, the market signals are pretty clear. If you want base-load electric power, burn coal. It’s cheap. It gives you reliable electricity at the lowest possible cost. Your industry will be competitive and our planet will end up destroying itself.
We need to put a signal that is much more powerful and at the same time, do a lot of research and development to figure out which of these pathways is viable and at what cost.
It’s not enough, by the way, to just put a price on carbon. We have to make societal decisions as well. For example, what do we think of nuclear power? Who is in favor? I am. Anybody else? Okay, a few people. Who’s against? All right.
The price of carbon will not decide this question. We’re going to need to vote, to debate it. We’re going to need to have a plan. There are valid arguments on both sides of this issue, but we’d better decide it and it’s not enough to have Cap and Trade to decide it. We actually need to have public decision-making and much more rational scrutiny of the options.
Other technologies pose tough decisions too. For instance, if we’re going to deploy renewables at scale, we need public right-of-ways for high-voltage transmission lines. We need to carry wind from the Dakotas to the populated centers.
We need to decide what we’re going to do with the Mojave Desert. How many solar panels are going to fill the desert and in which way? Yet not many people live in the Mojave. So you have to move energy to where it’s needed. That requires right-of-ways, land management, public decisions, ecosystem protection and so forth.
I’m in favor of these low-carbon options. But to be clear, all of them all require consensus and public investment.
U.S. policy paralysis
So what do people here [at this talk] think about the U.S. energy plan, the Obama plan? Have you read it?
It doesn’t exist. Obama’s rhetoric—“All of the above”—is not a plan. All of the above is to get past the election. There is no plan here.
It’s worse than my first year students by far, who easily can put together spreadsheets and give options and decide what to do. We have a Nobel Laureate Secretary of Energy in this country. Who has seen him recently?
Of course, he’s not been visible during the election because he might say something real. That could upset somebody and that could trigger advertisements by Super PACS.
So we have nothing. No plans energy, no policy documents, no long-term strategy, no honest speeches, no discussion at all. I have never seen anything like it. It’s almost a complete collapse of politics in this country. Or I should say it’s almost a complete collapse of policy in this country. There is no policy, by design. Policy is dangerous. Somebody might object. Somebody might not contribute to the campaign.
And so neither side says a word right now. But four years ago, this President wanted to do something. The one thing they tried to do—cap and trade—was the wrong thing. I want to emphasize this: Cap and trade is absolutely the wrong approach for this problem. Cap and trade puts a spot price on an issue that needs a 25-year price. These cap-and-trade systems were all proposed for one reason: because American politicians didn’t want to say the word “tax”.
An analogy has been made with the sulfur dioxide reductions of the 1990s, which used cap-and-trade. But that’s a completely different phenomenon from carbon emissions. Here’s why. Sulfur dioxide emissions are a flow pollutant. They don’t stay up in the air. In fact, they come down in the rain and cause acid rain. So if you put a current price on that pollution, you trigger a current decision to install smokestack scrubbers. You get the result that you want, which is reduction of sulfur oxides.
With CO2 though, you don’t want to define today’s level of CO2 emissions. What we really care about is emissions 20 years from now. What will our power system look like? Will we have made a fundamental transformation?
It actually doesn’t matter so much what we emit today because that’s already baked into our infrastructure: our energy systems, our buildings, our power plants, our cars. The question is, what are we going to have 20 years from now? And today’s price doesn’t determine that. The price 20 years from now does, along with the regulatory environment in effect then.
We need a different strategy. This is why Australia’s done the right thing to put a carbon tax, although they err by planning to convert it to a cap-and-trade system by 2015. Cap and trade does not make deeper, future choices evident. It’s not promoting the long-term technological changes that are needed.
Real costs, but ‘not worth wrecking the planet for’
As I said, climate change is just about the most complicated thing imaginable. Yet I should stress clearly, that if we really went to all the next-best energy alternatives—even using today’s technologies—we could probably de-carbonize the energy system substantially at a cost of maybe 2 percent of our GNP.
That’s a big cost. In the United States we’re a $15 trillion economy and so 2 percent is $300 billion a year of outlays. People would raise their eyebrows at that. But for a $15 trillion economy, that’s not such a big deal. It’s not worth wrecking the planet for.
The issue is complicated because it requires decisions. It requires collective action. It requires pathways. It requires a change of how we do things. It requires taking on vested interests. It requires new technologies.
That’s what makes it complicated, not that it’s going to break the world economy, or that it’s going to be the end of prosperity or anything like that. The only thing that could end prosperity is business as usual.
If we started the changeover now, at full-speed, with technologies we have right now, we could do it. The truth is we’d barely notice, although shareholders of some companies would take pretty heavy losses, a lot of Congressmen would be voted out of office. It might be quite interesting actually. But it would not break our economy or our society.
So there is fundamentally good news, which is that we have a lot of ways to proceed. We have a lot of solutions on the drawing board. Even though we will bear a cost to do this, we will still come out a happier, healthier, more robust society in the end, not only for having avoided the worst, but actually for having introduced more efficient, superior technologies.
We talked about green buildings and energy efficiency. I would add that electric vehicles add a startlingly exciting horizon for us in new forms of transport that are going to be much higher quality. Indeed, that newspaper that I like so much, The Wall Street Journal—except for its miserable op-ed section—had a wonderful insert today about the inevitability of self-driving vehicles.
As my engineering colleague says, it’s dangerous to text and to drive at that same time, so stop driving. That’s what the technology is going to allow us to do. And because it’s electric you can do wonderful things that you can’t do with mechanical transmission and internal combustion engines.
This is not the end of prosperity. This is actually an exciting avenue ahead but we’re going to have to take some decisions. We haven’t been able to take them yet. As I look around, my thought is that maybe Washington will be the last place to act on the planet, I’m sad to say.
Even within the United States, many places are moving ahead. They’re not waiting for China. They’re not waiting for Washington. They want to have a clean and responsible energy system even if it’s more costly for them right now. They know that ultimately the world’s going to have to move in that direction, and better to be an early mover than a late mover. I find all over the world that there are early movers who are ready to step up now.
Maybe we’ll feel better when we pay less attention to U.N. climate negotiations, of which I’m a part, where we wait for total unanimity, which never comes. Rather maybe we’ll feel better when we start championing those who will move ahead first. We should draw attention to them, give them support, and change the question to one of “Who can get there fastest?” In the end, those are going to be the ones that are going to benefit most.
Thanks very much. I’ll take questions now.
Can natural gas be a bridge to a lower carbon system?
With the right rules, yes. But we don’t have those rules in place today.
If there were a framework of a gradually rising prices on carbon emissions that started low today but rose predictably to a tens of dollars per ton of CO2 by 2025, that would be meaningful.
In this case, if decision-makers today were building power plants and thinking about the future—of the grid, of transport systems and the like, and could see ahead 20 years to know the impact of carbon costs on their decisions—then I think natural gas could well be used as a short-run substitute to replace coal and it could become a stepping stone.
Without that kind of plan, natural gas will become another entrenched, carbon-emitting infrastructure, protected by yet more vested interests. What we’ll probably do is build more dedicated pipelines and more dedicated infrastructure so that it becomes even harder to get off of the natural gas habit down the road.
As natural gas grows more profitable, it becomes bigger, and more entrenched. This is a very basic point: things that can be both profitable and very bad for us. This is because the profit is based on market prices. It’s not based on true social costs. When you have something like climate change, the environmental harm is an externality, and the market price is a miserable signal for what should be done.
Those who remain zealously committed to “market prices” do so denial of basic science. At this point, it is sheer willful propaganda that drives the skeptics. It’s not about scientific doubts. It’s not about what we’re observing, nor what we’re measuring, nor what our satellite systems are telling us, nor what energy balance data are showing us, nor what’s happening to ice sheets, nor what’s happening all over the world. This is willful denial because it’s profitable right now to deny it.
It’s really the height of irresponsibility given the moral implications for future generations. I don’t know whether they think their children are going to be in a different climate zone? A different Earth? Whether they think that climate change stops at the gates of their community? Whether it only affects poor people?
I don’t know what they’re thinking, but at this point it’s so bizarre, it’s beyond any normal behavior. It’s driven by a lot of money.
How will utilities evolve?
The utilities are not really the main agents of resistance actually. The utilities are regulated. They have a pretty straightforward mandated responsibility. If pricing were to change, they would change along with it. They’d be happy to run different kinds of power plants and many utilities are not resistant to these changes.
In fact some utilities have been part of the corporate coalitions on the side of pressing for a clear framework to reduce the carbon intensity. For many years a lot of utilities like Duke have said, “Give us the right price [including carbon]. We’ll make a different decision.” They’ve been very, very clear.
I don’t regard utilities as the main agents. They buy fuel so that they transform it, they’re not really playing the same role that the Koch brothers play or that the oil sector in general plays or the coal industry, which is really the powerful resistance in the country.
How can leaders better sell smarter climate and energy policy?
There are three things that can make proper energy and climate policy more palatable and they have not been done. One is the good, solid, economic logic to backload the carbon tax. Let it build up over time. There are rigorous economic reasons to do that, and it’s also politically correct.
Phase this in. This is not about today’s emissions. This is about the kind of energy system we will have in 2025 and especially the kind we will have in 2040. We have to make a technological transition that’s quite deep: to new energy systems, to new transport systems, to more efficient buildings.
A simple calculation shows the logic of what I think is the right political strategy also. You could promise today significant reductions in tariffs to give an incentive for the transition, and totally pay for those reductions with a back loaded carbon tax.
That would work because the current base of the clean technologies you aim to subsidize is tiny. As you increase the size of the renewable sector, you need a higher tax to pay for it. You can decrease the subsidy over time, and raise the level of the tax in parallel. If you keep constant the gap between subsidies for renewables and tax revenues from carbon, you’re always saying to industry:
There is going to be a $30 or $40 or $50 per ton CO2 advantage to go to the de-carbonized source. We guarantee that for the next 30 years. Today it will come via a big feed-in tariff. In the future it’ll come by a tax, and it will gradually substitute along the way.
Second, very closely related: I’m happy to have the future pay for a lot of this. This can be bond-financed. It doesn’t have to be current-financed because the future can bear some of this. It’s not only the current generation that needs these changes, so you can use inter-temporal fiscal policy—not in an irresponsible way, but to show that the load will be paid also by those who are going to bear the benefits of the cleaner environment,
The third point that I find completely missing right now is an idea of a framework and a plan. I’ve been involved in public policy for 30 years and have contributed to large-scale transformation.
You can’t tell the public that our plan is cap-and-trade. That’s not a plan. That’s frightening. That just means, “Oh. Our electricity prices are going up. What do you mean? Why? What’s that for? That doesn’t sound good.”
You have to explain to the public, “Look. We’re going to have better vehicles, smarter buildings, a smart grid. We’re going to be able to tap into renewable energy. We’re going to be able to get off of our Middle East dependency, and here’s how, quantitatively.”
I urged the Administration to do that in 2009. I went to the White House on several occasions and I put in my two cents to say, “Have a framework. Have a plan. Waxman-Markey is not enough. You have to explain not just the policy tool. You have to explain what America’s going to look like in 20 years, how we can live better, cleaner, more independent, longer-term resources and a safer climate.”
That is missing until today. And that, to my mind, is the biggest weakness here. It’s not leveling with the public. But it’s also not explaining that this is an all-grid story. There’s a lot of exciting new technology, exciting things to do. This isn’t going to break the economy.
I think the public would rally to this. Yes, the public would. The vested interest would not. To win this game is to win the public.
For PepsiCo, one of the world’s biggest makers of potato chips, the key to producing the crispiest chips possible is all about driving moisture out of raw potatoes. Paradoxically, though, potatoes are made up mostly of water.
Listening to a couple of coders gush over the virtues of gamification, location-based mobile services and open data standards, I might have mistaken the techies for sneaker-wearing pitchmen at a Silicon Valley hackathon.
