Sunday, October 07, 2007
A Humanitarian Approach to Climate Change
There aren't very many rational people any longer, even in the Red states, who doubt that climate change is one of the most serious issues facing humanity. Global poverty is perhaps the only other issue of comparable seriousness. America's approach to both these problems is inexplicably timid, as exemplified by our energy policy, and myopic.
The overarching objectives of our energy policy must be to reduce dramatically the world's dependence on petroleum products and emissions of greenhouse gases. As the most egregious offender on both counts, we have a moral duty, not just an obligation, to lead the world in addressing these critical issues. While we must lead, it is neither essential nor advisable for all the elements of our energy policy to be implemented within our borders. Initiatives such as mandating substantially higher automotive fuel efficiency standards, switching to compact fluorescent lamps, shifting to nuclear power generation and developing the technologies for cellulosic ethanol and coal-fired power generation with carbon sequestration clearly belong in the US, but others don't.
Crude oil prices and greenhouse gases recognize no borders. When Chinese demand pushes oil prices up, gasoline prices are pushed up all over the world. Wherever the smokestacks and exhaust pipes that belch carbon dioxide may be, the effects will eventually be felt by all. Conversely, if those smokestacks and exhaust pipes get cleaner, all of us benefit. This is the concept underlying carbon trading systems.
The concept can be taken further. Sugarcane is eight times more efficient a source of ethanol than corn. A wise energy policy would promote and fund the production of sugarcane ethanol wherever it can be produced most cost effectively, without concomitant deforestation, rather than subsidize the production of horrendously inefficient corn ethanol in Illinois.
A wiser energy policy would avoid the diversion of fertile land to the production of biofuels. Imagine a biofuel that can be produced from feedstock from land that has little or no other economic utility. Imagine further that this crop can be cultivated by the poorest people in the world, with such cultivation lifting them out of dire poverty to a level where they can send their children to schools rather than menial labor. Imagine, if you care, how we would be viewed by the world if America were to be the prime mover behind such a program.
Biodiesel from jatropha curcas is such a fuel. A lot has been written about jatropha – it thrives, with little tending, on land that many poor countries classify as fallow and uncultivable. The primary inputs of agricultural are land, labor, water, fertilizers and capital equipment. Jatropha grows on semi-arid land, needing neither fertilizers nor farm equipment. The poorest people in poor countries are landless agricultural laborers. The UN defines extreme poverty as living on less than a dollar (at purchasing power parity) per person per day. Assuming an average household size of 5.5 people, this translates to about $2,000 a year per household. Mere poverty is defined as $2 per capita per day. Tens of millions of households in poor countries would jump at the prospect of $4,000 a year (at PPP). Just two hectares (five acres) of jatropha would give them more than that and deliver biodiesel at below current market prices, sans subsidies.
A Humanitarian Proposal
Together with the other OECD countries, fund a global program to cultivate jatropha curcas in semi-tropical poor countries and produce biodiesel. The US would provide at least half the funding and the program would be implemented by a suitably skilled international agency, perhaps the UN.
Work with countries in Africa and the Indian sub-continent to identify and acquire land for the program (keeping corruption within tolerable limits), with a target of a hundred million hectares - under 10% of the area of these regions, excluding deserts, forests, reserves and agricultural land. Lease the land solely to landless menial laborers and marginal farmers, at two hectares per household. Require them to grow jatropha on this land. Transfer title to these laborers after authenticity and productivity have been clearly established.
Help fund the cost-efficient design and construction of oil mills and processing plants for converting jatropha oil into biodiesel (the technology exists). Establish contractual norms for purchasing jatropha oil - the oil mills could be owned by cultivator cooperatives and the processing plants by petrochemical companies. Biodiesel from jatropha will yield far more byproduct (10%) glycerin than the world currently consumes. Technology for handling this glut needs to be developed.
What can such a program achieve?
The annual production of biodiesel from 100 million hectares (area of Texas plus New Mexico) of jatropha will be just shy of America's consumption of diesel and furnace oil, 4.7 million barrels a day in 2006, or 5.5% of global oil consumption. Note that the bio-diesel produced need not be consumed in America - it ought to be consumed where it makes the most economic sense.
Predicting the impact on oil prices of changes in supply and demand is a mug's game. That conceded, a 5.5% demand drop is likely to lead to at least a $10 a barrel drop in oil prices. America imported 4.5 billion barrels of oil and products in 2006. Had prices been $10 a barrel lower, we would have saved $45 billion. The Middle East's export revenue would have been $72 billion lower.
Burning 4.7 million barrels a day of biodiesel instead of petro-diesel will reduce annual CO 2 emissions by about 580 million tons, a tenth of what America emits.
About 300 million people in Africa and the Indian sub-continent will be lifted out of crushing poverty. The chances of the children in these families being well nourished, educated and not condemned to menial labor will increase dramatically. America's reputation will be burnished.
What will it cost?
Paying for seed nurseries and the land to be granted under long-term leases, funding most of the cost of oil mills, providing risk capital for processing plants and administering the entire program may cost somewhere in the region of $50 to $75 billion. If the funding were to be spread over ten years, with America bearing half the cost, our annual contribution will be in the $2.5 to $3.75 billion range. To provide perspective, the proposed fiscal 2008 budget authorization for "military operations" in Iraq and Afghanistan is $141 billion, expenditure on "international affairs" was $30 billion in 2006, our annual expenditure on farm subsidies is over $20 billion and that on cosmetics is far higher.
Opportunities for the 300 million citizens of the world's wealthiest country to benefit by helping a like number of the world's poorest citizens are indeed rare. This is one. We must grab it, America.
The overarching objectives of our energy policy must be to reduce dramatically the world's dependence on petroleum products and emissions of greenhouse gases. As the most egregious offender on both counts, we have a moral duty, not just an obligation, to lead the world in addressing these critical issues. While we must lead, it is neither essential nor advisable for all the elements of our energy policy to be implemented within our borders. Initiatives such as mandating substantially higher automotive fuel efficiency standards, switching to compact fluorescent lamps, shifting to nuclear power generation and developing the technologies for cellulosic ethanol and coal-fired power generation with carbon sequestration clearly belong in the US, but others don't.
Crude oil prices and greenhouse gases recognize no borders. When Chinese demand pushes oil prices up, gasoline prices are pushed up all over the world. Wherever the smokestacks and exhaust pipes that belch carbon dioxide may be, the effects will eventually be felt by all. Conversely, if those smokestacks and exhaust pipes get cleaner, all of us benefit. This is the concept underlying carbon trading systems.
The concept can be taken further. Sugarcane is eight times more efficient a source of ethanol than corn. A wise energy policy would promote and fund the production of sugarcane ethanol wherever it can be produced most cost effectively, without concomitant deforestation, rather than subsidize the production of horrendously inefficient corn ethanol in Illinois.
A wiser energy policy would avoid the diversion of fertile land to the production of biofuels. Imagine a biofuel that can be produced from feedstock from land that has little or no other economic utility. Imagine further that this crop can be cultivated by the poorest people in the world, with such cultivation lifting them out of dire poverty to a level where they can send their children to schools rather than menial labor. Imagine, if you care, how we would be viewed by the world if America were to be the prime mover behind such a program.
Biodiesel from jatropha curcas is such a fuel. A lot has been written about jatropha – it thrives, with little tending, on land that many poor countries classify as fallow and uncultivable. The primary inputs of agricultural are land, labor, water, fertilizers and capital equipment. Jatropha grows on semi-arid land, needing neither fertilizers nor farm equipment. The poorest people in poor countries are landless agricultural laborers. The UN defines extreme poverty as living on less than a dollar (at purchasing power parity) per person per day. Assuming an average household size of 5.5 people, this translates to about $2,000 a year per household. Mere poverty is defined as $2 per capita per day. Tens of millions of households in poor countries would jump at the prospect of $4,000 a year (at PPP). Just two hectares (five acres) of jatropha would give them more than that and deliver biodiesel at below current market prices, sans subsidies.
A Humanitarian Proposal
Together with the other OECD countries, fund a global program to cultivate jatropha curcas in semi-tropical poor countries and produce biodiesel. The US would provide at least half the funding and the program would be implemented by a suitably skilled international agency, perhaps the UN.
Work with countries in Africa and the Indian sub-continent to identify and acquire land for the program (keeping corruption within tolerable limits), with a target of a hundred million hectares - under 10% of the area of these regions, excluding deserts, forests, reserves and agricultural land. Lease the land solely to landless menial laborers and marginal farmers, at two hectares per household. Require them to grow jatropha on this land. Transfer title to these laborers after authenticity and productivity have been clearly established.
Help fund the cost-efficient design and construction of oil mills and processing plants for converting jatropha oil into biodiesel (the technology exists). Establish contractual norms for purchasing jatropha oil - the oil mills could be owned by cultivator cooperatives and the processing plants by petrochemical companies. Biodiesel from jatropha will yield far more byproduct (10%) glycerin than the world currently consumes. Technology for handling this glut needs to be developed.
What can such a program achieve?
The annual production of biodiesel from 100 million hectares (area of Texas plus New Mexico) of jatropha will be just shy of America's consumption of diesel and furnace oil, 4.7 million barrels a day in 2006, or 5.5% of global oil consumption. Note that the bio-diesel produced need not be consumed in America - it ought to be consumed where it makes the most economic sense.
Predicting the impact on oil prices of changes in supply and demand is a mug's game. That conceded, a 5.5% demand drop is likely to lead to at least a $10 a barrel drop in oil prices. America imported 4.5 billion barrels of oil and products in 2006. Had prices been $10 a barrel lower, we would have saved $45 billion. The Middle East's export revenue would have been $72 billion lower.
Burning 4.7 million barrels a day of biodiesel instead of petro-diesel will reduce annual CO 2 emissions by about 580 million tons, a tenth of what America emits.
About 300 million people in Africa and the Indian sub-continent will be lifted out of crushing poverty. The chances of the children in these families being well nourished, educated and not condemned to menial labor will increase dramatically. America's reputation will be burnished.
What will it cost?
Paying for seed nurseries and the land to be granted under long-term leases, funding most of the cost of oil mills, providing risk capital for processing plants and administering the entire program may cost somewhere in the region of $50 to $75 billion. If the funding were to be spread over ten years, with America bearing half the cost, our annual contribution will be in the $2.5 to $3.75 billion range. To provide perspective, the proposed fiscal 2008 budget authorization for "military operations" in Iraq and Afghanistan is $141 billion, expenditure on "international affairs" was $30 billion in 2006, our annual expenditure on farm subsidies is over $20 billion and that on cosmetics is far higher.
Opportunities for the 300 million citizens of the world's wealthiest country to benefit by helping a like number of the world's poorest citizens are indeed rare. This is one. We must grab it, America.
Labels: Climate Change, Global Warming
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