Feb 17, 2023·edited Feb 17, 2023Liked by Noah Smith
"it invests $8 for every $1 of GDP growth, which is an absolutely terrible return on capital"
I feel like there is an entire post about how development economists think about growth and investment that's lurking behind this. Like, are you talking about an $8 investment producing just a one-off $1 increase in the next year's GDP? That obviously would be terrible and would repesent massive mal-investment. Investments at a loss.
But if what this means is that you invest $8, and effectively get a perpetuity at 12.5%... How in G*d's name would that be classified as "an absolutely terrible return on capital"? If I could buy that investment I'd be thrilled!
In any case, I feel like I am just not understanding how you're using the numbers here.
As to China cutting coal consumption: Not-Gonna-Happen. The CCP isn't the slighted bit interested in the Western World's green objectives. It just isn't. It will posture, twist and politic like crazy (after all, they need us to keep buying their stuff). But as to objective changes, you can forget it. Mark my words. Let's revisit the data in 5 and 10 years, and I'm confident that China's consumptions of fossil fuels (including coal) will keep going up.
Yeah...it’s not just china my guy. It’s Africa, most of Asia and Latin and South America. Those people are largely poverty stricken and many of their economies are industrializing trying to remedy some of that. It never ceases to amaze me how people like you sit over here and expect all those poor people to just stay poor and not benefit from fossil fuels the same way the west has. Get real...
I quite accept that climate is changing. For one thing, it has always changed and always will change. Second, we have some very bright people on order of, oh, Al Gore and John Kerry telling us about catastrophe, etc., etc. You know, the guy who invented the internet and those terribly important people who own all those non-energy efficient houses and who travel on private jets to those critical meetings at Davos and to the terribly necessary climate conferences that just can't be held via Zoom; those guys. Oh, I know they claim to buy "climate offsets" but couldn't they cut back on their personal emissions and still buy those offsets? And, just out of curiosity, how does Gretta get from place to place?
So, yes, I accept that climate is changing. Temperature going up. Time Magazine has been telling us so and they started telling us that, oh, about five years after they stopped hectoring us about the climate cooling.
Yes, Noah, I do accept that temperature is - perhaps - increasing. I absolutely understand that China is not really interested in lowering it's carbon footprint given all the new coal plants being built and planned for the future. So, I ask your forgiveness - and that of your readers when I say that if you want me to really, really care about cutting back on my personal carbon footprint, stop the hypocrisy of our worsers - really, Al Gore, John Kerry, et al are absolutely not my betters - and, above all, make a change in carbon usage economic for me and mine, without putting people in my part of Canada on the unemployment line.
Here in Canada we have a federal government that is preaching a "just transition" and they seem to want to get oil and gas industry workers to lose their well paying jobs and they offer jobs as truck drivers, janitors, etc. Really! Those are truly the examples of green industry jobs that the government publications are offering. And you wonder why many of us are not enamored of this "wonderful" transition.
You will recall that the "inventor of the internet" and that Nobel Prize recipient, a certain Mr. Gore in (I think it was) 2007 stated that within "5 or 6 years" the Arctic ice cap would be totally melted. I just two days ago saw a statistic that said in the most recent year for which there was information (2021, I believe) the Arctic Ice cap was larger than when he gave us his sage advice.
Finally, as above, I accept that the climate is changing, perhaps even warming but, truly, truly, I am not convinced that any such change will be catastrophic so, again, if you want to get me to change my carbon behavior, ensure that it will be economic and will not cause mass unemployment.
China would love to get off coal. Look at the air pollution. I've been there a few times. It's terrible. https://waqi.info/
I don't see how. Solar panels and wind are intermittent power sources. What is the backup? Batteries? Batteries won't be a solution for decades if ever. Nat gas? From where? Pipelines from Russia. It will take years to get this figured out.
USA is on debt death spiral so the IRA and subsidies for green energy are only adding to the inevitable. If USA balanced the books, the world would go into a depression and the CO2 would drop substantially. Is everyone happy now?
The only thing that can completely replace coal is another form of reliable energy. Solar and wind can’t because they are intermittant and there is no storage solution that can store more than a few hours of electricity.
At best they can limit the increase in coal by replacing some coal generation.
It has been demonstrated in every single country that has installed solar and wind.
That means only gas, hydro or nuclear can eliminate coal.
I find it remarkable that such an intelligent commentator does not grasp this basic fact. I suspect the problem is not appreciating the physical limits of battery storage. The notion that because prices are coming down batteries will able to do this is wrong, orders of magnitude wrong.
I think a simpler explanation is that solar doesn't work at night or on cloudy days and China wants to have power at those times. Levelised cost numbers don't take this into account. We don't really need a more complex theory.
Noah, I have previously commented on this column - which, you will recall that I praised. I expect that you will also recall, I cast doubt on the idea that the "excess" warming would be catastrophic.
Okay, I certainly expect you - and many others - to disagree with me. That is, of course, the nature of an open forum such as you offer herein.
I have certainly heard that this "excess" warming would be catastrophic and, as noted, I offered an (uneducated) opinion to the contrary. One thing for which I don't recall having seen any information concerns the level of carbon dioxide that human kind should aim for.
What I mean is that we are told (endlessly, of course) that carbon dioxide is bad, evil, must be stopped, etc., etc. All of those assertions are made but they do not take into account that human beings, just by the act of breathing exhale carbon dioxide continuously. I presume that there is no intent to stop humans (but perhaps other animals?) from exhaling? So, what IS a "good" level of carbon dioxide?
As a further query, I have heard that the level of carbon dioxide has been increasing - which I do not dispute as apparently it is absolutely measurable and no one is arguing to the contrary. I have further heard (again, endlessly) that it is this increased carbon dioxide that is the reason for the warming of the planet. As I understand matters, the link between the carbon dioxide increases and warming is still a theory but is widely accepted. [On the other hand, I do recall that big pharma told us that the Covid shots would prevent transmission of Covid 19 so I am uncertain about the "wide acceptance" given that clearly the shots do not prevent transmission.]
So, again, what is the "correct" or "best" level of CO2? As above, I quite accept that carbon dioxide levels are increasing, but I would also note that agricultural yields have increased over the last number of decades. I have seen (and talked to technical people) who attribute these increased yields to increased levels of carbon dioxide - they call CO2 "plant food." And, perhaps it is. Remember, I am not a technical guy.
To repeat, what is the "correct" or "best" level of CO2? I ask because many, many folk - you included, Sir - want to limit carbon dioxide as if it were a pollutant. Given that we humans produce CO2 and given that it appears to be beneficial for plant life, and given that CO2 is a product that is widely used in our society, it seems to me that to simply label it a pollutant is misguided at best and dangerous at worst. So, if we do need CO2, how much do we need?
I do apologize for seeming to be a contrary cuss but I am serious that this is an item that I have not seen addressed and it does seem to me that it should be.
"China’s leaders may swagger and bellow on the world stage, but they’re very sensitive to mass unrest, as was demonstrated the recent rapid capitulation over Zero Covid after only a few short protests. If there’s one thing they probably don’t want, it’s millions of angry unemployed coal miners in the regions surrounding the capital city."
Six million coal miners is a significant number and those workers are likely among the least educated. It is likely just above subsistence living for them. And it does appear the China has a history of coal miner strikes directly impacting the political landscape.
Until China (and the rest if us) can reliably produce and store renewable energy at scale, the cost and convenience of coal, particularly for heating, is hard to beat.
Great article. Best thing we can do is apply pressure in our states that are still burning coal. We lack credibility with China as long as our side of the street isn’t clean.
China has a rainy or monsoon season lasting 6 months of the year. So has large parts of Africa. So solar doesn't work for these places far less than at night when the sun don't shine.
As far as geopolitical bargains go, the best one would be to drop the silly rhetoric about the South China Sea, and leave it countries in the region to sort out (while sending plenty of anti-ship missiles to Taiwan). But the US Navy has the same kind of political power as the Chinese coal lobby.
USN insistence on FONOPS creates massive problems for the US in lots of places. And, again because of improvements in anti-ship missiles, it's pointless. Ships sailing close to China would be sunk instantly if hostilities broke out. Look at how Russia's mighty Black Sea Fleet turned out to be a paper shark in the Ukraine war.
"China is focused on becoming the world’s green energy superpower."
More accurately, China is focused on becoming the world's energy (of all kinds) superpower.
Why? Because China is focused on being the world's superpower, period.
"it invests $8 for every $1 of GDP growth, which is an absolutely terrible return on capital"
I feel like there is an entire post about how development economists think about growth and investment that's lurking behind this. Like, are you talking about an $8 investment producing just a one-off $1 increase in the next year's GDP? That obviously would be terrible and would repesent massive mal-investment. Investments at a loss.
But if what this means is that you invest $8, and effectively get a perpetuity at 12.5%... How in G*d's name would that be classified as "an absolutely terrible return on capital"? If I could buy that investment I'd be thrilled!
In any case, I feel like I am just not understanding how you're using the numbers here.
Xi went after oil in 2014 because that was Zhou Yongkang’s power base. He didn’t care about the environmental impact.
As to China cutting coal consumption: Not-Gonna-Happen. The CCP isn't the slighted bit interested in the Western World's green objectives. It just isn't. It will posture, twist and politic like crazy (after all, they need us to keep buying their stuff). But as to objective changes, you can forget it. Mark my words. Let's revisit the data in 5 and 10 years, and I'm confident that China's consumptions of fossil fuels (including coal) will keep going up.
Yeah...it’s not just china my guy. It’s Africa, most of Asia and Latin and South America. Those people are largely poverty stricken and many of their economies are industrializing trying to remedy some of that. It never ceases to amaze me how people like you sit over here and expect all those poor people to just stay poor and not benefit from fossil fuels the same way the west has. Get real...
I think some of the problem may be that China’s massive solar industry isn’t particularly efficient at generating power. https://twitter.com/akshatrathi/status/1620745384447594498?s=46&t=n06SHGQx3ciNj4nDXJbuag
Very interesting column, Noah.
Now, having said that ....
I quite accept that climate is changing. For one thing, it has always changed and always will change. Second, we have some very bright people on order of, oh, Al Gore and John Kerry telling us about catastrophe, etc., etc. You know, the guy who invented the internet and those terribly important people who own all those non-energy efficient houses and who travel on private jets to those critical meetings at Davos and to the terribly necessary climate conferences that just can't be held via Zoom; those guys. Oh, I know they claim to buy "climate offsets" but couldn't they cut back on their personal emissions and still buy those offsets? And, just out of curiosity, how does Gretta get from place to place?
So, yes, I accept that climate is changing. Temperature going up. Time Magazine has been telling us so and they started telling us that, oh, about five years after they stopped hectoring us about the climate cooling.
Yes, Noah, I do accept that temperature is - perhaps - increasing. I absolutely understand that China is not really interested in lowering it's carbon footprint given all the new coal plants being built and planned for the future. So, I ask your forgiveness - and that of your readers when I say that if you want me to really, really care about cutting back on my personal carbon footprint, stop the hypocrisy of our worsers - really, Al Gore, John Kerry, et al are absolutely not my betters - and, above all, make a change in carbon usage economic for me and mine, without putting people in my part of Canada on the unemployment line.
Here in Canada we have a federal government that is preaching a "just transition" and they seem to want to get oil and gas industry workers to lose their well paying jobs and they offer jobs as truck drivers, janitors, etc. Really! Those are truly the examples of green industry jobs that the government publications are offering. And you wonder why many of us are not enamored of this "wonderful" transition.
You will recall that the "inventor of the internet" and that Nobel Prize recipient, a certain Mr. Gore in (I think it was) 2007 stated that within "5 or 6 years" the Arctic ice cap would be totally melted. I just two days ago saw a statistic that said in the most recent year for which there was information (2021, I believe) the Arctic Ice cap was larger than when he gave us his sage advice.
Finally, as above, I accept that the climate is changing, perhaps even warming but, truly, truly, I am not convinced that any such change will be catastrophic so, again, if you want to get me to change my carbon behavior, ensure that it will be economic and will not cause mass unemployment.
China would love to get off coal. Look at the air pollution. I've been there a few times. It's terrible. https://waqi.info/
I don't see how. Solar panels and wind are intermittent power sources. What is the backup? Batteries? Batteries won't be a solution for decades if ever. Nat gas? From where? Pipelines from Russia. It will take years to get this figured out.
USA is on debt death spiral so the IRA and subsidies for green energy are only adding to the inevitable. If USA balanced the books, the world would go into a depression and the CO2 would drop substantially. Is everyone happy now?
The only thing that can completely replace coal is another form of reliable energy. Solar and wind can’t because they are intermittant and there is no storage solution that can store more than a few hours of electricity.
At best they can limit the increase in coal by replacing some coal generation.
It has been demonstrated in every single country that has installed solar and wind.
That means only gas, hydro or nuclear can eliminate coal.
I find it remarkable that such an intelligent commentator does not grasp this basic fact. I suspect the problem is not appreciating the physical limits of battery storage. The notion that because prices are coming down batteries will able to do this is wrong, orders of magnitude wrong.
Just do the maths!!
I think a simpler explanation is that solar doesn't work at night or on cloudy days and China wants to have power at those times. Levelised cost numbers don't take this into account. We don't really need a more complex theory.
Noah, I have previously commented on this column - which, you will recall that I praised. I expect that you will also recall, I cast doubt on the idea that the "excess" warming would be catastrophic.
Okay, I certainly expect you - and many others - to disagree with me. That is, of course, the nature of an open forum such as you offer herein.
I have certainly heard that this "excess" warming would be catastrophic and, as noted, I offered an (uneducated) opinion to the contrary. One thing for which I don't recall having seen any information concerns the level of carbon dioxide that human kind should aim for.
What I mean is that we are told (endlessly, of course) that carbon dioxide is bad, evil, must be stopped, etc., etc. All of those assertions are made but they do not take into account that human beings, just by the act of breathing exhale carbon dioxide continuously. I presume that there is no intent to stop humans (but perhaps other animals?) from exhaling? So, what IS a "good" level of carbon dioxide?
As a further query, I have heard that the level of carbon dioxide has been increasing - which I do not dispute as apparently it is absolutely measurable and no one is arguing to the contrary. I have further heard (again, endlessly) that it is this increased carbon dioxide that is the reason for the warming of the planet. As I understand matters, the link between the carbon dioxide increases and warming is still a theory but is widely accepted. [On the other hand, I do recall that big pharma told us that the Covid shots would prevent transmission of Covid 19 so I am uncertain about the "wide acceptance" given that clearly the shots do not prevent transmission.]
So, again, what is the "correct" or "best" level of CO2? As above, I quite accept that carbon dioxide levels are increasing, but I would also note that agricultural yields have increased over the last number of decades. I have seen (and talked to technical people) who attribute these increased yields to increased levels of carbon dioxide - they call CO2 "plant food." And, perhaps it is. Remember, I am not a technical guy.
To repeat, what is the "correct" or "best" level of CO2? I ask because many, many folk - you included, Sir - want to limit carbon dioxide as if it were a pollutant. Given that we humans produce CO2 and given that it appears to be beneficial for plant life, and given that CO2 is a product that is widely used in our society, it seems to me that to simply label it a pollutant is misguided at best and dangerous at worst. So, if we do need CO2, how much do we need?
I do apologize for seeming to be a contrary cuss but I am serious that this is an item that I have not seen addressed and it does seem to me that it should be.
"China’s leaders may swagger and bellow on the world stage, but they’re very sensitive to mass unrest, as was demonstrated the recent rapid capitulation over Zero Covid after only a few short protests. If there’s one thing they probably don’t want, it’s millions of angry unemployed coal miners in the regions surrounding the capital city."
Six million coal miners is a significant number and those workers are likely among the least educated. It is likely just above subsistence living for them. And it does appear the China has a history of coal miner strikes directly impacting the political landscape.
See http://www.cpreview.org/blog/2021/10/can-china-have-it-all-in-a-coal-transition-how-the-ccp-will-struggle-to-balance-climate-reform-with-labor-concerns
Until China (and the rest if us) can reliably produce and store renewable energy at scale, the cost and convenience of coal, particularly for heating, is hard to beat.
See https://www.reuters.com/markets/commodities/chinas-daily-coal-output-hits-record-high-november-meet-heating-demand-2022-12-15/
Great article. Best thing we can do is apply pressure in our states that are still burning coal. We lack credibility with China as long as our side of the street isn’t clean.
China has a rainy or monsoon season lasting 6 months of the year. So has large parts of Africa. So solar doesn't work for these places far less than at night when the sun don't shine.
As far as geopolitical bargains go, the best one would be to drop the silly rhetoric about the South China Sea, and leave it countries in the region to sort out (while sending plenty of anti-ship missiles to Taiwan). But the US Navy has the same kind of political power as the Chinese coal lobby.
USN insistence on FONOPS creates massive problems for the US in lots of places. And, again because of improvements in anti-ship missiles, it's pointless. Ships sailing close to China would be sunk instantly if hostilities broke out. Look at how Russia's mighty Black Sea Fleet turned out to be a paper shark in the Ukraine war.
man, this makes me sad. i wonder if coal will suddenly decline like how solar has exploded. i sure hope so.