Fantasy Stories

carbon thermometer
I attended a seminar recently on carbon cap-and-trade schemes. While skeptics say such schemes are merely a licence to pollute, I have kept an open mind about them. They are a useful subject for discussion and learning. The idea of such schemes is that each country sets a ‘cap’ — the maximum amount of carbon that all users of petrochemicals collectively can import, produce and sell (‘upstream’ schemes) or can emit (‘downstream’ schemes). That cap is then divided into a large number of ‘allowances’ that are given out (or auctioned) to importers and producers of petrochemicals, or to emitters of CO2. The sum of the allowances cannot exceed the cap. To the extent you need more allowances than you’re allotted to continue to operate, you need to buy them from those who aren’t fully using theirs. Supply and demand will then determine the ‘market’ price for these allowances. The lower the cap, the higher the value of each allowance.

It’s an interesting approach in theory, but is has a lot of practical problems:

  • If you use an ‘upstream’ approach, you are effectively just jacking up the wholesale and retail price of petrochemicals. Some have argued that you might as well just put a big tax on petrochemicals, use the proceeds to fund renewable energy sources and research, and dispense with the cap-and-trade scheme entirely.
  • If you use a ‘downstream’ approach, you are massively increasing the number of companies that have to purchase allowances. Some believe the administrative cost of such schemes could exceed the cost of the allowances, and undermine the viability of the whole project.
  • There are a lot of incentives for cheating the system. We all know how well governments enforce pollution laws today. It is likely the cost of bribing officials would be less than the cost of allowances, so it is quite possible that CO2 would ‘mysteriously’ continue to rise far beyond the levels provided for by the cap.

What is more interesting is that the proponents of caps, both environmentalists and polluters (willing to do their part as long as there’s a level playing field) extol the virtues of such schemes, but do so from utterly irreconcilable worldviews.

The polluters and what-me-worry politicians of the Bush and Harper camps see such schemes as a way to avoid Kyoto, implementation of which they believe would be devastating to the endless continuation of the current growth-dependent economy. All we need to do, they say, is set the caps high enough that the allowances are modestly priced and provide a measurable, gradual incremental cost to doing business-as-usual that they can manage, and report on to shareholders and citizens with the appropriate self-congratulation.

The naive environmentalists and technophiles (there were a couple of these at the seminar) see such schemes as a way to quickly and radically curtail carbon emissions by making a ‘market’ that appeals to business and encourages compliance. All we need to do, they say, is set the caps low enough that we can meet and exceed Kyoto, and let the ‘market’ sort out how to do this on its own, without the need for governments or moral suasion. Like credit card fraud and insurance, it’s just a new, measurable cost of doing business.

So at meetings like the seminar I attended, the attendees, at least superficially, smile and shake hands and agree they are of one mind, that this can work if we want it to.

But then when you talk with the attendees one-on-one you hear some nagging doubts. The three bulleted problems above are top-of-mind, but there is a deep sense that this is just too easy, that it’s an optical illusion, a compromise that can’t hold and in fact doesn’t even exist.

And in fact they’re right. It’s all smoke and mirrors. The reality is that the caps that the polluters and right-wing business-as-usual governments want would have to be in the stratosphere, and would be allowed to increase when new oil sources were found or to the extent population rose (and the price of allowances would also be capped, by issuing an unlimited number of additional allowances as soon as the ‘market’ price exceeded that cap). These caps would essentially allow CO2 levels to continue to rise, rather than bringing them down. The minute the caps were lowered, three things would happen: (a) it would become more profitable to circumvent the scheme than to comply with it, even with penalties, (b) authorities would realize that they couldn’t really enforce compliance with the scheme, and (c) the price of the allowances would rise from nominal to astronomical. The polluters would cry foul, and say that wasn’t what they agreed to, and would pour money into the coffers of politicians willing to rescind the scheme.

Meanwhile, the caps that the naive environmentalists and technophiles foresee would initially be so low that these three things would happen immediately. The lawyers would move in to defend the polluters (including governments, who are among the worst polluters) and tie up any attempt to enforce the ‘punitive’ scheme for decades. Remember, ExxonMobil still hasn’t paid for the Exxon Valdez disaster.

I’ve illustrated the cognitive dissonance between the two groups with the graphic above.

At this seminar, this was the elephant in the room. Everyone learned about the scheme, and nodded, but just about everyone knew, deep inside, that this was far too easy a plan to be workable.

At root, both sides have a story in their heads, consistent with their own worldview, and they can’t conceive of any other story. On the one side, the story is all about business-as-usual continuing forever, under the auspices of the oxymoron of ‘sustainable growth’, with minor tinkering as needed, self-regulated and governed by the market.

On the other side, the story is about money from excessive pollution being spent on innovation that will allow us to rise to the challenge of climate change and radically shift from non-renewable to renewable energy in a generation.

The problem is that, while these two stories are close enough that they can, with a bit of nudging, overlap, they are both fantasies. Neither is rooted in reality. The stories that are rooted in reality, like George Monbiot’s Heat, like Jim Kunstler’s The Long Emergency, and like Pierre Berton’s The Great Depression, are so different from the stories that all of us have been brought up to believe, that we cannot imagine them, cannot conceive of them as being true. The Great Depression couldn’t really have been that bad, and it could never happen again, could it? The Long Emergency is a cautionary tale, an exaggeration like 1984, right? Heat is a deliberate hyperbole designed to shake us out of our apathy and stir us to at least try to make Kyoto work, isn’t it?

But they’re not. It is not these three stories of what has been and what is to be that are fiction. It is the stories that we have taught ourselves to believe (because it is easy and because it requires no dramatic action on our part) that are fiction. Alas, it is only when you read and study a lot more than most people have either the time or inclination to do, that you realize this. Most of the world is not yet ready to stop believing their fantasy stories and realize that books like Monbiot’s and Kunstler’s and Berton’s are not ‘what if’ stories, but ‘what was and what will be’ stories. We are not yet ready to acknowledge that continuing to behave and think the way we do, day after day, with or without carbon trading schemes, will lead unquestionably to the desolation of the Earth and the end of our civilization.

I have come to grips with the fact that we do what we must, and that by the time we realize what we must do to save our beleaguered planet and ourselves, it will be far too late. It is not in our nature, or in the nature of any creature, to behave otherwise than as we do. We are preoccupied with the needs of the moment. We have never been otherwise, and we are not wired to be otherwise, no matter how the fervent believers in an emerging global human consciousness deny it.

I said little at the seminar. There didn’t seem any point. But I did listen and nod when, afterwards, all of the attendees I spoke with confessed to some cognitive dissonance, some deep-seated doubt, and told me that it is their fears for the world we are leaving our children and grandchildren that makes them want to believe, yet fills them with nagging doubt, and a growing dread. Our instincts are shouting to us. But we are not yet listening. The elephant is still in the room, and we’re beginning to sense itspresence, but we can’t, and won’t, see it.

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5 Responses to Fantasy Stories

  1. Jon Husband says:

    one of your best posts .. thanks

  2. lugon says:

    Thanks, Dave: you just forced me to have yet another adjustment reaction! I’m at the “still struggling in agony” stage, so take my comments as those coming from a part-time denialist. ;-)Lately I’ve had this image of a child climbing up the ladder and then sliding down the slide. A not yet very skilled child will make many attempts, and when she’s ready she’ll suddenly find herself sliding down in horror/fun.I thought of this as an explanation of how H5N1 is attempting to acquire human-to-human transmission capabilities: it hasn’t succeeded so far.But it may also apply to us: How many people are trying to go past their own ladder? I mean, does looking at figures and tendencies give us the full picture? What else could we measure or at least see if we looked at places that are away from the spotlight?Struggling may not be the best course of action. :-?

  3. Brutus says:

    I’ve been trekking along this road for a couple years now, reading most of your posts and many of the book recommendations, as well as lots of other related blogs. Your third- and second-to-last paragraphs, though not new ideas, speak to where I’ve arrived in my thinking, though uncomfortably so. The myth of progress is so strong that hope springs eternal, despite a deeper knowledge that the path we’re on won’t be altered in any significant way. But then there’s the question of how to respond ethically, as opposed to fiddling while Rome burns, so to speak. I haven’t yet solved that for me, and I don’t suspect there is a one-size-fits all solution.I agree with Jon Husband that this is one of your best posts. Interestingly, this new report crosses my path just today, which supports our shared sense of futility: I downloaded the 570 pp. report the news refers to but haven’t yet begun to read. More evidence, which I expect will have little effect.

  4. jim anglin says:

    Interesting article whose main thrust is quite easy to grasp. However the graphic is confusing and you could considerably heighten the overall impact of your message by making it clearer i.e. which levels you’re talking about and where (cap levels? CO2 levels?)Jim

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