Blog Post #4 Climate Change
Climate Change. The ongoing debate whether or not the world’s temperatures are indeed rising, when scientists everywhere agree that they are, is doing nothing but delaying further progress. This illusion that there is even a debate about climate change, coupled with the leader of the west pulling out of the only internationally held agreement that we have to deal with climate change and all the aspects of life that it impacts, is an obvious step in the wrong direction and makes our future seem dim. Despite these setbacks, we do continue to see progress by the forward thinkers that will guide us to a solution.
The world needs to shift towards clean energy and renewables such as wind and solar. The atmosphere has some absorptive capacity when it comes to emissions from CO2, SO2 and methane, so we aren’t talking about a planet-wide embargo on oil and coal, just providing a way to not be so dependent on dirty energy. Recently at the One Planet Summit in France on December 12th, the World Bank announced that they will stop funding oil and gas projects starting in 2019. “Trillions of dollars must be invested in clean energy technology to meet the Paris Agreement’s goal of limiting average global warming to two degrees Celsius (3.6 degrees Fahrenheit) over pre-Industrial Revolution levels.”  By investing and subsidizing clean energy developments, markets are formed and provide alternatives to conventional methods. By subsidizing this investment, the cost to the consumer of clean energy is cheaper, incentivizing cheaper energy can make people and large businesses make the crucial switch. “A lack of money has long been a constraint to the global effort to limit global warming, worsened by US President Donald Trump’s decision to withdraw America from the Paris Agreement and slash funding for climate projects.”  Lack of funding will hinder our ability to find the next breakthrough solution to the energy crisis we face. Only through invention, and the subsequent spreading of those ideas and inventions through global trade, and then fostering innovation of those inventions to perfect it further, can we drive society into the future. A lack of invention due to budget cuts of the green economy will impede progress. By adding new minds and thinkers through the creation of new markets, and fostering their development from early on, there is a greater chance of developing that new method for energy that can cure the problems we have. But to get there, we cannot start by cutting that funding and investment, and giving it to fossil fuel interests. “In its 2016 annual report, the World Bank Group said it had invested just over US$3 billion in “extractive industries”, which also include mining, in 2016 – three times as much as the year before.”  The World Bank provides financial loans for the development of capital programs, which will then foster economic activity in other countries. They also focus eliminating extreme poverty.  In addition to this, they are now starting to appeal to clean energy. Governments should follow in this example and invest in their own countries’ green economies. Through competition in these markets, better quality goods (in this case clean energy methods) and cheaper goods become widely available to consumers. Wide acceptance of these goods (in this case clean energy) causes a wide-scale reduction in emissions that help the poorest of the population get access to cheaper energy. A wide-scale reduction in emissions and getting the poor to have energy and electricity should be amongst the top concerns for a government. This is only possible by investing, subsidizing and incentivizing the economy.
Another recent development is with Tesla’s electric Semis. Walmart, PepsiCo, JB Hunt Transportation Services, Ryder System Inc., and DHL all have placed reservations on Tesla’s new vehicle releasing in 2019, even with the reservation price jumping from $5,000 to $20,000. The trucks cost $150,000 for a 300-mile range and costs $180,000 for 500-mile range. This trend follows a renewed effort by large corporations to cut their emissions along their supply lines by 2030.  “It has been shown that the average annual cost of operating a tractor trailer for one year is approximately $180,000 per year or $1.38 per mile, depending on the number of miles the truck drives in one year.”  The major driving cost in operating a typical tractor trailer with a combustion engine is the diesel fuel associated. Statistical data is not yet available as to the average annual cost of operating a Tesla electric Semi, but the numbers here are comparable. The price to just buy the Tesla Semi costs the same amount to own and operate a typical tractor trailer in widespread use today. In order to incentivize more than just the biggest corporations to switch to electric semis, the market needs to reduce the cost to the consumer. Small businesses use vehicles for a large amount of their operations, and these businesses will not be able to switch off of cheaper oil. In the long-term, the price will decrease due to new competitors entering the market and technological innovations that make the construction of these products become better and thereby reducing the inputs required. But that’s long term. And even then, small businesses might still use dirty semis because they are cheaper. The government needs to step in and subsidize the market, and further enhance green projects.
A study was done in China that studied the adoption of electric vehicles (EV) and projected sales trend. “Penetrations of EV can lower health-impairing pollutants and greenhouse emissions, thereby providing sources of domestic employment and investment.”  It should be the goal of any governing body of a people to do an action that promotes the health and saves lives of those people. Promoting EV use and having them become prevalent in a society has the direct effect which has been proven by many studies, of saving lives. It also creates jobs and investment in the economy, another purpose of government. “Our results of EV sales show rising trend, corresponding with that in the U.S. and U.K. Yet the numerical result is bigger due to the large vehicle fleets that China already has.”  The data show that people are responding to this growing phenomena by actively buying EVs. If the consumer is reacting to EVs by buying them, it shows a growing market that should be invested in and expanded further while it grows. Now is the time to do so. “For policy makers, incentive strategies can be formulated based on the multivariate models, such as subsidies, tax adjustment, and employment encouragements.”  Incentivizing the economy is imperative in order to fully exploit the benefits of the market. Instead of subsidizing an overproduction of corn and wheat, the government can shift a portion of these subsidies towards the green economy in the form of tax breaks and active employment marketing. “Thus, improvements made to reduce full social lifetime cost is a direct incentive for the boost of EV market, including the size and lifetime of key components (i.e., batteries, electric motors), the cost of key materials (i.e., lithium, platinum and membrane) and the maintenance and repair requirements…usually, incentive policies include the subsidy-based and the tax-based policies. The former include purchase, charging as well as maintenance subsidies.”  If these EVs can provide users with a reduction in “full social lifetime cost[s]” then businesses and individuals will make that switch, and feel good doing it. Right now, the costs are very high, and the better-off portion of society only has access to these EVs. If the price drops, due to a change in government policy towards subsidizing the green economy (which would be in line with the Paris Climate Change Summit’s overall goal), then more of the common everyday commuters will go out and buy EVs. “Enhancing the recharging infrastructure, and the availability of fast-charging points is another direct incentive. A potential buyer will not purchase an EV unless he/she is assured of having constantly-available charging places.”  With firms naturally profit maximizing, big oil companies will make the switch if the EV market is profitable enough. This will in turn prompt them to convert their gas stations into electric charging stations, or at least add on to their current gas stations an electric charging station. Making these available and synonymous with gas pump prevalence will encourage more EV buyers. “Other incentives include urban sprawl control and lane access that are specially designed for EV; free parking or electricity; exemption of emissions test; and better insurance products.”  Even developing houses far from the city centers will be encouraged, which creates the problem of promoting an agenda of inefficient dispersion, as oppose to efficient concentration (sprawl). Urban sprawl also creates more emission problems, and EV use can help reduce these effects and would be a less expensive way of doing so as oppose to moving houses. Insurance cuts to EV buyers can also lead to encouragement of EV use, with clients making an active switch in order to save money in the long run.
Climate change will not be solved without governments playing an active role. Delays in this process will only exacerbate the inevitable problems that will come. The data is there. Mobilizing the green economy, which is already showing powerful signs with a lack of government incentivizing; Imagine with the government backing it. The change will only hurt the lobbying interests of fossil fuels. According to the World Health Organization, “Ambient (outdoor air pollution) in both cities and rural areas was estimated to cause 3 million premature deaths worldwide in 2012.”  We must meet this growing pandemic by nothing but impactful action and just policy making that meet the needs of the people, and help them make choices that better their situations.
 Agence France-Presse. “World Bank Will No Longer Finance Oil, Gas Projects from 2019.” South China Morning Post, 12 Dec. 2017, http://www.scmp.com/news/world/europe/article/2124040/world-bank-will-no-longer-finance-oil-gas-projects-2019-pressure.
 “World Bank Group – International Development, Poverty, & Sustainability.” World Bank, http://www.worldbank.org/.
 Geuss , Megan. “Who’s Putting Money down for a Tesla Semi?” Ars Technica, 29 Nov. 2017, arstechnica.com/cars/2017/11/whos-putting-money-down-for-a-tesla-semi/.
 “The Real Cost of Operating a Truck.” Find a Trucking Job, http://www.findatruckingjob.com/trucking-info/trucking-articles/real-cost-operating-truck.
 Zhang Y, Zhong M, Geng N, Jiang Y (2017) Forecasting electric vehicles sales with univariate and multivariate time series models: The case of China. PLoS ONE 12(5): e0176729. https://doi.org/10.1371/journal.pone.0176729
 “Ambient (Outdoor) Air Quality and Health.” Ambient (Outdoor) Air Quality and Health Fact Sheet, World Health Organization, Sept. 2016, http://www.who.int/mediacentre/factsheets/fs313/en/.