08 April 2010

Does Paul Krugman Advocate Energy Conservation and Deemphasize Technology? Yes

I have been having an interesting debate with a few economists in a previous thread about Paul Krugman's views of climate policy. I read his latest piece as emphasizing energy conservation and de-emphasizing technology. A few economists write in the comments that my reading is "absurd." This matters of course because anyone who thinks that we can stabilize carbon dioxide concentrations at a low level via conservation while de-emphasizing technology just doesn't have a good grasp of the problem.

So I Googled around a bit to see what Krugman has said in the past. And guess what? He advocates energy conservation and de-emphasizes technology! Here are some of his earlier statements that are unambiguous on these matters and consistent with how I interpret his latest piece.

On the importance of energy conservation in a 2007 column:

There’s nothing heroic about California’s energy policy — but that’s precisely the point. Over the years the state has adopted a series of conservation measures that are anything but splashy. They’re the kind of drab, colorless stuff that excites only real policy wonks. Yet the cumulative effect has been impressive, if still well short of what we really need to do.

The energy divergence between California and the rest of the United States dates from the 1970s. Both the nation and the state initially engaged in significant energy conservation after that decade’s energy crisis. But conservation in most of America soon stalled: after a decade of rapid progress, improvements in auto mileage came to an end, while electricity consumption continued to rise rapidly, driven by the growing size of houses, the increasing use of air-conditioning and the proliferation of appliances.

In California, by contrast, the state continued to push policies designed to encourage conservation, especially of electricity. And these policies worked.

People in California have always used a bit less energy than other Americans because of the mild climate. But the difference has grown much larger since the 1970s. Today, the average Californian uses about a third less total energy than the average American, uses less than 60 percent as much electricity, and is responsible for emitting only about 55 percent as much carbon dioxide.

How did the state do it? In some cases conservation was mandated directly, through energy efficiency standards for appliances and rules governing new construction. Also, regulated power companies were given new incentives to promote conservation, via rule changes that “decoupled” their profits from the amount of electricity they sold.

And yes, a variety of state actions had the effect of raising energy prices. In the early 1970s, the price of electricity in California was close to the national average. Today, it’s about 50 percent higher.

Incidentally, since someone is bound to mention it: the California energy crisis of 2000-2001 has nothing to do with this story. That crisis was caused by market manipulation — we’ve got it on tape — made possible by ill-conceived deregulation, not conservation.

Back to California’s success. As the higher price of power indicates, conservation didn’t come free. Still, it’s striking how invisible California’s energy policy remains. It’s easy to see why New York has much lower per capita energy consumption than, say, Georgia: it’s a matter of high-rises versus sprawl, mass transit versus driving alone. It’s less obvious that Los Angeles is a much greener city than Atlanta. But it is.

So is California a role model for climate policy? No and yes. Even if America as a whole had matched California’s conservation efforts, we’d still be emitting about as much carbon dioxide now as we were in 1990. That’s too much.

But California’s experience shows that serious conservation is a lot less disruptive, imposes much less of a burden, than the skeptics would have it.
On the relative importance of research and development, from a CNN discussion across the table from Bjorn Lomborg:
But getting in place a system that gives people an incentive to reduce their emissions has got to be an important part of the set of precautions we're going to take. . .

Of course we do -- you know, of course we do research and development. Of course. And we do research and development in medical care, but we also try to provide incentives for people to actually do the right thing. And that's what the health care debate in the United States is all about. . .

If you say, well, you know, let's do research, that's mostly a way of postponing, when there's a lot of reasons to think that time may be running out. . .

The idea that we can sit here -- sit here in our respective studios -- and say, well, we ought to have the wise men in a big research project somewhere in Geneva, or something, figure out what the technology is going to be, and that's the only serious thing we should be doing, that we shouldn't be providing a schedule of gradually tightening caps on emissions, which will give people a market incentive to worry about it -- that's just bizarre.

And, you know, again, a lot of the things you can do. The McKenzie (sic) study, a lot of these studies do suggest that there's energy savings stuff that people would actually save money by doing, that they're not doing. I have enough sense that there are limits to rational behavior, that some of that is probably true.

But the main thing is, there are lots of low-cost, prosaic, ordinary stuff -- not high-tech -- painting your roof white, you know, using a -- driving a smaller car. All of these are things that, given an incentive, people will do. Why not give them that incentive?
So yes, I conclude that Krugman emphasizes energy conservation and de-emphasizes technological innovation. Even further, he explicitly favors the former over the latter in the CNN discussion. And that means that I think that he just doesn't understand the nature of the challenge.

Krugman defenders are invited to provide evidence to the contrary about his written or spoken views on conservation and innovation.

27 comments:

  1. I don't think you can solve all of the problems with conservation of course. For example, Krugman is completely ignoring the relationship between economic development in third world countries and fossil fuel usage. The only ways to solve that is to either keep them third world or to provide non-fossil fuel alternative for them.

    Given that 5/6 of the planet is "developing" and assuming they attain the same CO2 efficiency as the developed nations, it's easy to see that Houston we've got a problem. In fact, the only way I personally see to forestall a doubling of CO2 is via technology development. Cap and trade works as long as you have developing nations to trade CO2 credits too, or for developed nations which...guess what...have applied new CO2 reducing technologies to have something to trade for.

    All that said, it is my opinion that there is a huge amount of progress that can easily be made in fuel conservation in developed nations (and there are plenty of good reasons, politically and ecological, besides AGW for us to do so).

    It's just hopelessly naive to expect that conservation by itself is going to make a big long term dent in atmospheric CO2 levels. There should be a debate about what is the best way to attain technological solutions, but there shouldn't be any debate that this is the only viable long term strategy available.

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  2. Roger

    agreed that in these pieces (i just read your excerpts) he emphasizes conservation over technology.

    So not sure why you picked the previous article (which clearly didn't make that emphasis) as an exemplar of his supposedly flawed thinking.

    The commonality between this piece and the previous piece is:

    "getting in place a system that gives people an incentive to reduce their emissions"

    I'm sure you would agree that if there were incentives to reduce emissions, say a carbon tax or a cap and trade system, the relevant technological progress will have more resources directed towards it.

    If energy was free there would be little research or development on energy saving technologies. If adding carbon to the atmosphere continues to be free there is likely to be insufficient research on carrbon reducing technologies.

    Cap and trade and regulation has driven innovation on SO2 and NOx control. There is no reason to think that it would be totally ineffective on the (admittedly much larger and more difficult) GHG issue.

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  3. Most true believers in the AGW world view engage in magical thinking about energy sources and the results of conservation. Krugman is not unique in this at all.

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  4. -2-caveat emptor

    "getting in place a system that gives people an incentive to reduce their emissions"

    This is the nub of the problem. Getting people to reduce their emissions -- which Krugman thinks will happen via "conservation" (which refers to reducing consumption of energy) -- is never going to be a big part of efforts to decarbonize the economy.

    You write: "
    I'm sure you would agree that if there were incentives to reduce emissions, say a carbon tax or a cap and trade system, the relevant technological progress will have more resources directed towards it."

    No. This is the problem.

    "There is no reason to think that it would be totally ineffective on the (admittedly much larger and more difficult) GHG issue."

    Well, there is a lot of wiggle room in "totally ineffective" but I am hard pressed to think of any significant innovations that have come out of Europe related to the ETS -- well, other than the HFC-23 thing, and the Hungarian carbon credit recycling, and . . .. ;-)

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  5. caveat emptor: "So not sure why you picked the previous article (which clearly didn't make that emphasis) as an exemplar of his supposedly flawed thinking."

    So your argument is Krugman can't keep his own arguments straight? We should either take what he has said seriously, or we shouldn't. Krugman has been quoted here using nearly 800 of his own words. If your argument is this is cherry picking, that is a strange argument too.

    "I'm sure you would agree that if there were incentives to reduce emissions, say a carbon tax or a cap and trade system, the relevant technological progress will have more resources directed towards it."

    If you damage economic growth through a measure, that reduces the money available for spending on alternatives, this does not increase resources available to be "directed towards it."

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  6. I find it perverse calling taxes an incentive as if it's a reward.

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  7. I have a hypothesis that might explain this disagreement. Roger has a book coming out in which he decomposes the Kaya Identity and concludes that it is technology that will allow us to reduce emissions, not conservation. Unfortunately for Roger, this is conventional wisdom. I even wrote that in the book I published in 2006.

    Thus, Roger needs to generate some opposition to his thesis, otherwise he won't look like an "iconoclast" and a "skeptical heretic." So when Roger reads Krugman's article, Roger finds an opportunity to manufacture some dissent and makes the claims that Krugman doesn't understand the role of technology.

    Of course, anyone who reads the article can see that that claim is absurd. Krugman, along with everybody else who has a brain cell, understands that it is technology that is going to bail us out of the climate change problem. The fundamental debate is over what kind of policy to enact that most effectively leads to the development and deployment of this new technology.

    I suspect that over the next few months, we're going to see many, many posts from Roger claiming that so-and-so doesn't understand the role of technology. Whenever you read that, just remember that Roger has a new book coming out and he wants to sell a few copies.

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  8. California is an interesting example for Mr. Krugman to bring up. Having grown up there but moved to the east coast 30 years ago, I know what it was and try to read the LA Times and SacBee to see what's going on. They have done some innovative things with respect to fostering conservation on housing an appliances and the billing structure for electricity tends to be lower prices for people who use less and higher prices for people who use more so in a sense, it foster conservation. However, the cost of establishing the base load capacity and the cost of distribution systems actually have much higher costs per kilowatt hour to deliver electricity to the small users. They make up the losses by charging the heaviest users the highest prices. As a result, most of the industrial and manufacturing base has left the state and California imports more and more of the raw materials and finished goods that used to be made locally. So California has de-industrialized to a rich, white collar coast and poor agricultural inland economy. The loss of the industrial and manufacturing base has eroded California's middle class.

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  9. I'm glad to see that Roger has the good sense to object to Krugman's ridiculous-ness.

    Kudos to not just swallowing the "Nobel" pill like the Lame Stream Media, Roger.

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  10. -7-Andrew Dessler

    I see that you are hard at work trying to maintain the perception that climate scientists such as yourself are cranky, bitter and don't like to hear certain voices in the debate ;-)

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  11. 10: Roger

    I'm glad to see that you misrepresent my comment just like you misrepresent Krugman.

    Just to emphasize: I wanted all the other readers to recognize that you have a book coming out and you know that if you want to sell books and get on the Colbert Report there needs to be some controversy surrounding your premise.

    Unfortunately, the idea that technology is key is completely uncontroversial and long ago accepted, so you have to manufacture this controversy by misrepresenting what other people say.

    Like you, I assume that fat royalty checks are nice (you'll have to let me know ;) ). I guess I wouldn't go as far you in trying to get them, though. Say hi to Stephan Colbert for me.

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  12. -11-Andrew Dessler

    Dude! Try the decaf ;-)

    I am glad to hear that you agree with my views on the role of technology.

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  13. Roger: I think it's more accurate to say that YOU agree with MY views on technology. Just to jog your memory, I published the following paragraph in the first edition of my book in 2006 (p. 102, and this idea was our idea, even then it was conventional wisdom):

    As a result, to the extent that policies target any of the components of emissions growth [meaning the various terms of the Kaya identity, which we had just discussed], the focus is nearly always on technology. Technological advances that lead to reductions in either how much energy the economy consumes, or how much CO2 is emitted to produce this energy, could greatly reduce future greenhouse gas emissions. The huge gap between the A1F and A1T scenarios illustrates the vast divergence of futures potentially attainable through alternative technological paths alone.

    Everyone knows this, Roger. Even Krugman. In fact, it seems you were the last one to the party. ;)

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  14. Roger:

    I'd love to know what makes you and Dessler so sanguine about the technology. I've been observing the science of photoconversion, fuel cells, biomass conversion, etc., for a good long time, and seen precious little promise of a breakthrough. We've spent billions trying to find simple efficient systems to split water or generate electricity using light, and come up empty. We've done a little better with fuel cells, but there's nothing that's imminently going to replace the internal combustion engine. The 'hydrogen economy', which looked so promising once, has run into some uncompromising limitations on hydrogen storage. Living organisms, which have been doing R&D on the problem for around a billion years, haven't figured out a really good way to dissolve cellulose, and Orgel's second law applies. Carbon sequestration, except perhaps at the point of emission, looks thermodynamically unpromising. We have done pretty well with battery technology, but the down side of that is the dramatic improvements are probably behind us.

    Of course, this is an unwise thing for a scientist to be writing; I should really be telling you we can lick these problems given another 50 billion bucks of funding for pure research.

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  15. -13-Andrew Dessler

    Your snark level is coming down, thanks ... just a bit further and we might be accused of having an exchange of ideas;-)

    Just to clarify ...

    Al Gore says that we have all the technology that we need, Joe Romm says we have (just about) all we need, IPCC says that the majority of technological advance needed to stabilize will occur spontaneously (ie, without policy) . . .

    I disagree with Gore, Romm and IPCC on these points.

    Are you saying that you agree with me, and not them, on the role of technology in decarbonization? Or are you just saying something trivial, like "technology matters"?

    Please do clarify, it is not at all clear from your paragraph.

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  16. more ... -13-

    Oh yeah, lets not forget Pacala and Socolow (stablization wedges)!

    I just took a look at your book (with E. Parsons) and pages 102-106 are really excellent. Nice job.

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  17. Carrick -1-

    Carrick, just read again what you wrote:

    'The only ways to solve that is to either keep them third world or to provide non-fossil fuel alternative for them.'

    I guess the real world is not a video game. 'To keep them third world' - Commander Carrick, how will you do this? Blow them up? Bomb them? Or organize an international boycott? And who is exactly 'us' - the US? And who is third world: China? India? And how exactly will you provide them with alternatives? US and them, if it only were so simple...

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  18. Werner Krauss, try reading it a third time.

    I am not advocating keeping anybody "third world":

    With no technological developments, a fully industrialized China at todays technology level would be be emitting nearly as much CO2 as the entire planet (excluding them) is right now. A fully industrialized world would be emitting at least four times as much CO2 as now.

    In my opinion, unless you bomb everybody back to the stone ages, the only alternative to is to provide alternatives that reduce CO2 emissions, or accept and adapt to a much hotter planet.

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  19. -16-Roger,

    'stabilization wedges'

    LOL (which I actually did). Good thing I wasn't drinking anything when I read that or I would have lost a keyboard. I couldn't decide whether to laugh or cry when I first read the original article, but on further consideration, I chose laughter.

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  20. "In California, by contrast, the state continued to push policies designed to encourage conservation, especially of electricity. And these policies worked."


    That's why California imports 40% of it's electricity...good energy policy?

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  21. Roger

    From your response above I gather you don't agree that setting a price on carbon will significantly contribute the development of "low carbon" technology.

    I am assuming from reading your other statements that you do accept some need for low carbon technology.

    So do you believe that the required technology will develop anyhow (without carbon price incentives) - so no action needed?

    Or do you believe we need targeted support (subsidies) for certain technologies?

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  22. Roger: Andrew Dessler’s contention that it's now conventional wisdom that technology is the preferred the solution to climate change is dubious, to say the least. The Europeans certainly don’t believe that. I’ve sat through more meetings and negotiations with the EU than I care to remember, and advancing the notion of technology inevitably led to accusations of delay. This view is certainly evident in the EU’s enthusiasm for taxes and regulation and its indifference towards funding energy R&D. In many senses, the debate hasn’t moved much beyond where it was in 2002, when Hoffert et al. observed in Science that climate change was a technology issue that “cannot be simply regulated away.” Surprising as it may seem, eight years later many still believe it can be.

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  23. Krugman wants conservation and little emphasis on technology. Hmmm.

    The one thing about Krugman is that you merely need to wait awhile and then he will be all about technology and nothing on conservation.

    Then some fellow like Don Luskin will point out Krugman has changed his position.

    Then Krugman will state he did not change his position. Then Brad DeLong will write a 4000 word essay on how Krugman was always meaning technology and that everyone misinterpreted Krugman.

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  24. Of course, we'll have to improve our energy conservation: how can one be against painting your roof white or driving a smaller car? And we'll have to innovate, of course. How could we do otherwise? It seems very tough to create a debate between these common sensical propositions.

    But now thanks to the new rhetorical action, viz. to "de-emphasize", it is now possible. Whatever what de-emphasizing means, it is there to create a dillemma, as Andrew Dessler noticed. Building a dillemma is important when one of the horn is (let's not say over, that would be cheap) "emphasized". Excluding anything else than technological innovation (i.e. not emphasizing innovation enough is de-emphasizing it) is also important when one sells futurological arguments.

    I wish now I could advertize a forthcoming book about futurological arguments.

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  25. Roger,

    Having just been directed to this post by one of your more recent entries (on Krugman), you and anyone else checking out your back catalogue may find this Robert Stavins article interesting:

    "Both Are Necessary, But Neither is Sufficient: Carbon-Pricing and Technology R&D Initiatives in a Meaningful National Climate Policy"
    http://belfercenter.ksg.harvard.edu/analysis/stavins/?p=827

    Some middle ground, perhaps?

    For what it's worth, I offered some additional thoughts on Stavins' thoughtful piece here:
    http://stickmanscorral.blogspot.com/2010/11/carbon-price-vs-technology-r.html

    0-[-<

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