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The 
Climate 
Challenge: 
Saving 
Ourselves 
RM 
1.12.14 
There 
is 
no 
recorded 
time 
in 
human 
history 
where 
there 
has 
not 
been 
some 
type 
of 
religious 
or 
secular 
apocalyptic 
vision…..the 
world 
is 
always 
just 
about 
to 
end 
due 
to 
some 
imminent 
disaster. 
In 
recent 
times 
this 
has 
manifested 
in 
a 
new 
form 
of 
utopianism, 
where 
we 
are 
starting 
to 
see 
new 
movements 
proclaiming 
some 
promised 
land, 
second 
coming 
or 
techno-­‐utopia. 
Who 
knows, 
they 
may 
be 
right 
but 
history 
shows 
an 
inexorable 
but 
snails 
pace 
march 
forward 
towards 
a 
better 
world. 
As 
humans, 
we 
are 
on 
a 
quest 
for 
both 
survival 
and 
self-­‐ 
improvement. 
This 
is 
built 
into 
our 
DNA 
but 
is 
always 
a 
work 
in 
progress. 
But 
our 
fascination 
with 
saving 
the 
planet, 
as 
part 
of 
this 
process, 
is, 
I 
believe 
a 
deeply 
flawed 
distraction. 
Of 
course 
we 
need 
a 
healthy 
and 
functioning 
ecosystem, 
in 
order 
to 
survive 
and 
progress 
but 
the 
earth 
does 
not 
need 
saving, 
we 
do. 
The 
earth 
has 
been 
around 
for 
billions 
of 
years 
and 
will 
likely 
be 
around 
for 
billions 
more. 
It 
has 
survived 
constant 
climatic 
changes 
and 
seen 
life 
forms, 
such 
as 
the 
dinosaurs, 
come 
and 
go. 
Humanity, 
as 
we 
know 
it, 
will 
be 
no 
different. 
The 
earth, 
I’m 
sorry 
to 
inform 
you, 
has 
no 
interest 
in 
whether 
we 
are 
here 
or 
not. 
It 
is 
governed 
by 
complex 
and 
interactive 
systems, 
which 
will 
keep 
going, 
in 
some 
form 
or 
other, 
regardless 
of 
famine, 
wars, 
asteroid 
strikes 
or 
major 
climate 
change. 
It’s 
time 
to 
drop 
this 
narrative 
and 
get 
on 
with 
saving 
ourselves. 
Now 
we’ve 
got 
that 
out 
of 
the 
way, 
what’s 
the 
problem? 
Simply 
put, 
we 
have 
broadly 
defined 
some 
ecosystem 
limits 
that 
we 
need 
to 
live 
within, 
in 
order 
to 
support 
our 
current 
life 
forms 
and 
styles. 
This 
is 
arguable 
at 
the 
small 
scale 
but 
from 
a 
global 
perspective, 
there 
is 
some 
number 
of 
GHG 
emissions 
that 
we 
need 
to 
stay 
within 
in 
order 
to 
avoid 
a 
catastrophic 
breakdown 
in 
our 
life 
support 
systems. 
350ppm 
or 
450ppm…there’s 
a 
number, 
somewhere, 
that 
will 
likely 
fluctuate 
as 
new 
information 
comes 
into 
the 
global 
climate 
model. 
As 
long 
as 
we 
have 
a 
number, 
we 
can 
work 
to 
stay 
within 
it. 
Currently, 
we 
try 
to 
apply 
a 
patchwork 
of 
binding 
and 
non-­‐binding 
cap 
and 
trade 
type 
models, 
hoping 
that 
magically 
people 
will 
stop 
consuming 
as 
they 
are 
now 
and 
that 
countries 
will 
somehow 
limit 
their 
own 
emissions 
without 
specifying 
how 
they 
might 
do 
that. 
What 
I 
am 
proposing, 
and 
did 
so 
firstly 
in 
a 
2008 
paper, 
is 
that 
we 
limit 
production 
of 
fossil 
fuels 
rather 
than 
consumption 
of 
them. 
In 
this 
way, 
we 
know 
exactly 
how 
much 
is 
coming 
out 
of 
the 
ground 
and 
therefore 
how 
much 
could 
possibly 
be 
emitted. 
We 
can 
then 
control 
the 
global 
emissions 
profile 
very 
efficiently 
at 
the 
macro 
level 
and 
not 
worry 
about 
what 
individual 
countries 
end 
up 
emitting. 
In 
other 
words, 
we 
create 
a 
tap 
mechanism, 
which 
we 
can 
use 
to 
control 
the 
path 
of 
emission 
reductions, 
thus 
knowing 
we 
can 
achieve 
any 
target 
we 
set. 
But, 
how 
do 
we 
get 
an 
agreement 
on 
production? 
We 
see 
the 
shenanigans 
around 
OPEC 
and 
their 
inability 
to 
agree 
supply 
targets. 
Nevertheless, 
there 
is 
precedent 
for 
this 
with 
the 
1987 
Montreal 
Protocol, 
where 
producers 
came 
together 
and 
agreed 
to 
phase 
out 
ozone 
depleting 
chemicals. 
The 
key 
advantage 
there 
was
that 
there 
was 
a 
small 
group 
of 
producers 
and 
so 
agreement 
wasn’t 
too 
hard 
to 
come 
by. 
It 
may 
seem 
far-­‐fetched 
to 
think 
fossil 
fuel 
producers 
could 
come 
to 
any 
kind 
of 
agreement 
but 
when 
we 
look 
at 
the 
data, 
there 
may 
be 
hope. 
As 
we 
can 
see 
the 
key 
group 
here 
is 
G20, 
which 
is 
fast 
becoming 
the 
key 
group 
for 
global 
cooperation. 
It’s 
also 
worth 
looking 
at 
the 
three 
key 
producers 
who 
are 
the 
US, 
China 
and 
Russia. 
They 
are 
all 
permanent 
members 
of 
the 
UN 
Security 
Council 
and 
with 
climate 
change 
becoming 
more 
of 
a 
global 
security 
issue. 
Ultimately, 
this 
suggests 
that 
the 
key 
to 
any 
serious 
attempt 
to 
control 
global 
fossil 
fuel 
production 
lies 
with 
the 
global 
leadership 
group, 
especially 
the 
Us, 
China 
and 
Russia. 
Without 
them, 
no 
sustainable 
solution 
is 
likely 
to 
be 
found. 
If 
there 
can 
be 
an 
agreement 
on 
global 
production, 
then 
that 
will 
allow 
the 
market 
to 
re-­‐price 
emissions 
and 
start 
to 
send 
the 
appropriate 
price 
signals 
to 
the 
consumer. 
With 
a 
limited 
quantity 
of 
inputs 
available, 
behaviour 
will 
change 
rapidly. 
It’s 
important 
to 
note 
that 
this 
is 
no 
different 
to 
how 
the 
monetary 
system 
works. 
We 
have 
had 
a 
25 
year 
inflation 
targeting 
program, 
which 
has 
supposedly 
kept 
prices 
stable 
but 
in 
fact 
has 
allowed 
for 
enormous 
asset 
and 
credit 
bubbles 
to 
emerge. 
It 
is 
no 
surprise 
that 
money 
supply 
growth 
and 
global 
emissions 
are 
highly 
correlated. 
They 
are 
both 
a 
result 
of 
unrestrained 
consumption. 
We 
saw 
recently 
here 
in 
NZ 
what 
happened 
when 
the 
RB 
limited 
the 
quantity 
of 
credit 
for 
homebuyers 
with 
the 
loan 
to 
value 
restrictions. 
Prices 
in 
many 
regions 
dropped. 
Supply 
has 
a 
big 
impact 
on 
both 
demand 
and 
on 
prices. 
The 
sooner 
we 
get 
clear 
ecosystem 
based 
price 
signals 
into 
the 
global 
fossil 
fuel 
market, 
the 
sooner 
consumers 
can 
see 
the 
true 
cost 
of 
their 
activities. 
Like 
the 
money 
supply, 
a 
lack 
of 
quantity 
control 
does 
not 
impede 
consumption. 
And 
anyone 
who 
thinks 
price 
doesn’t 
matter. 
It’s 
the 
must 
effective 
way 
to 
bring 
about 
change, 
even 
where 
demand 
is 
relatively 
inelastic. 
We 
will 
also 
start 
to 
see 
price 
signals 
being 
sent 
by 
the 
insurance 
market 
as 
the 
risk 
profile 
around 
climate 
changes. 
So 
where 
does 
a 
global 
cap 
on 
fossil 
fuel 
production 
leave 
us? 
I 
think 
there 
are 
3 
opportunities 
to 
come 
out 
of 
that. 
One 
is 
the 
opportunity 
for 
climate 
equity 
to 
take 
shape. 
I 
see 
this 
potentially 
happening 
through 
domestic 
tradable 
quotas 
and 
tradable 
energy 
quotas, 
where 
people 
receive 
a 
an 
energy 
quota 
and 
can 
trade 
that 
with 
others. 
Changes 
in 
the 
price 
signal 
will 
allow 
for 
the 
full 
force 
of 
creativity 
and 
innovation 
to 
be 
applied. 
Currently, 
we 
rely 
on 
subsidies 
to 
make 
alternative 
energy 
products 
really 
work. 
Once 
we 
have 
a 
more 
transparent 
pricing 
system, 
entrepreneurs 
and 
investors 
will 
be 
more 
likely 
to 
enter 
the 
market 
and 
really 
drive 
innovation. 
And 
finally, 
and 
probably 
most 
importantly, 
we 
must 
adapt 
to 
the 
coming 
changes. 
There 
is 
no 
point 
waiting 
to 
see 
what 
global 
agreements 
manifest. 
There 
is 
no 
point 
wailing 
about 
saving 
the 
planet. 
What 
we 
have 
right 
in 
front 
of
us 
now 
are 
some 
major 
challenges 
around 
flooding, 
coastal 
erosion, 
and 
severe 
wind 
damage. 
We 
should 
stop 
worrying 
about 
our 
emissions. 
They 
are 
insignificant. 
It’s 
clear 
that 
any 
global 
agreement 
will 
have 
to 
come 
from 
the 
major 
political 
players. 
We 
need 
to 
focus 
on 
our 
own 
problems 
and 
hopefully 
drive 
some 
innovation 
through 
adaptation 
solutions 
we 
create. 
The 
Netherlands 
has 
a 
200 
year 
Climate 
Strategy. 
They 
are 
addressing 
their 
challenges 
head 
on. 
They 
are 
not 
wringing 
their 
hands 
about 
saving 
the 
planet, 
as 
they 
are 
too 
busy 
trying 
to 
save 
themselves. 
And 
so 
should 
we.

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The Climate Challenge: Saving Ourselves

  • 1. The Climate Challenge: Saving Ourselves RM 1.12.14 There is no recorded time in human history where there has not been some type of religious or secular apocalyptic vision…..the world is always just about to end due to some imminent disaster. In recent times this has manifested in a new form of utopianism, where we are starting to see new movements proclaiming some promised land, second coming or techno-­‐utopia. Who knows, they may be right but history shows an inexorable but snails pace march forward towards a better world. As humans, we are on a quest for both survival and self-­‐ improvement. This is built into our DNA but is always a work in progress. But our fascination with saving the planet, as part of this process, is, I believe a deeply flawed distraction. Of course we need a healthy and functioning ecosystem, in order to survive and progress but the earth does not need saving, we do. The earth has been around for billions of years and will likely be around for billions more. It has survived constant climatic changes and seen life forms, such as the dinosaurs, come and go. Humanity, as we know it, will be no different. The earth, I’m sorry to inform you, has no interest in whether we are here or not. It is governed by complex and interactive systems, which will keep going, in some form or other, regardless of famine, wars, asteroid strikes or major climate change. It’s time to drop this narrative and get on with saving ourselves. Now we’ve got that out of the way, what’s the problem? Simply put, we have broadly defined some ecosystem limits that we need to live within, in order to support our current life forms and styles. This is arguable at the small scale but from a global perspective, there is some number of GHG emissions that we need to stay within in order to avoid a catastrophic breakdown in our life support systems. 350ppm or 450ppm…there’s a number, somewhere, that will likely fluctuate as new information comes into the global climate model. As long as we have a number, we can work to stay within it. Currently, we try to apply a patchwork of binding and non-­‐binding cap and trade type models, hoping that magically people will stop consuming as they are now and that countries will somehow limit their own emissions without specifying how they might do that. What I am proposing, and did so firstly in a 2008 paper, is that we limit production of fossil fuels rather than consumption of them. In this way, we know exactly how much is coming out of the ground and therefore how much could possibly be emitted. We can then control the global emissions profile very efficiently at the macro level and not worry about what individual countries end up emitting. In other words, we create a tap mechanism, which we can use to control the path of emission reductions, thus knowing we can achieve any target we set. But, how do we get an agreement on production? We see the shenanigans around OPEC and their inability to agree supply targets. Nevertheless, there is precedent for this with the 1987 Montreal Protocol, where producers came together and agreed to phase out ozone depleting chemicals. The key advantage there was
  • 2. that there was a small group of producers and so agreement wasn’t too hard to come by. It may seem far-­‐fetched to think fossil fuel producers could come to any kind of agreement but when we look at the data, there may be hope. As we can see the key group here is G20, which is fast becoming the key group for global cooperation. It’s also worth looking at the three key producers who are the US, China and Russia. They are all permanent members of the UN Security Council and with climate change becoming more of a global security issue. Ultimately, this suggests that the key to any serious attempt to control global fossil fuel production lies with the global leadership group, especially the Us, China and Russia. Without them, no sustainable solution is likely to be found. If there can be an agreement on global production, then that will allow the market to re-­‐price emissions and start to send the appropriate price signals to the consumer. With a limited quantity of inputs available, behaviour will change rapidly. It’s important to note that this is no different to how the monetary system works. We have had a 25 year inflation targeting program, which has supposedly kept prices stable but in fact has allowed for enormous asset and credit bubbles to emerge. It is no surprise that money supply growth and global emissions are highly correlated. They are both a result of unrestrained consumption. We saw recently here in NZ what happened when the RB limited the quantity of credit for homebuyers with the loan to value restrictions. Prices in many regions dropped. Supply has a big impact on both demand and on prices. The sooner we get clear ecosystem based price signals into the global fossil fuel market, the sooner consumers can see the true cost of their activities. Like the money supply, a lack of quantity control does not impede consumption. And anyone who thinks price doesn’t matter. It’s the must effective way to bring about change, even where demand is relatively inelastic. We will also start to see price signals being sent by the insurance market as the risk profile around climate changes. So where does a global cap on fossil fuel production leave us? I think there are 3 opportunities to come out of that. One is the opportunity for climate equity to take shape. I see this potentially happening through domestic tradable quotas and tradable energy quotas, where people receive a an energy quota and can trade that with others. Changes in the price signal will allow for the full force of creativity and innovation to be applied. Currently, we rely on subsidies to make alternative energy products really work. Once we have a more transparent pricing system, entrepreneurs and investors will be more likely to enter the market and really drive innovation. And finally, and probably most importantly, we must adapt to the coming changes. There is no point waiting to see what global agreements manifest. There is no point wailing about saving the planet. What we have right in front of
  • 3. us now are some major challenges around flooding, coastal erosion, and severe wind damage. We should stop worrying about our emissions. They are insignificant. It’s clear that any global agreement will have to come from the major political players. We need to focus on our own problems and hopefully drive some innovation through adaptation solutions we create. The Netherlands has a 200 year Climate Strategy. They are addressing their challenges head on. They are not wringing their hands about saving the planet, as they are too busy trying to save themselves. And so should we.