Tuesday, May 31, 2011

Inclusivity

Much has been made by people who dislike the UNFCCC treaty process of the fact that a global treaty-making process creates huge obstacles for success. When any given treaty has to satisfy roughly 200 nations, the argument goes, you are setting yourself up for failure, because no treaty (that has any bite to it at all) will satisfy 200 nations. Therefore, if you’re lucky, the best you’ll get is some sort of watered-down aspirational document.

I’m not sure I believe this argument (which is not to say I don’t think the UN process is flawed. I just think it's most important flaws are other things). I think it’s true that if you look at the day-to-day workings of the UNFCCC process, you’ll see a lot of static produced by the Bolivias of the world. Indeed, the recent canonical example would be the fact that Bolivia, with its lone refusal to sign the Copenhagen Accord that emerged from COP-15 in 2009, single-handedly prevented it from being entered into the UNFCCC canon.

But so what? The Copenhagen Accord still exists. It was signed by everyone else, and it seems to have some meaningful sense of legitimacy, given that nations continued entering the non-binding pledges it called for well after the conference. Whether countries will fulfill their non-binding pledges is another matter, but that’s a built-in problem of the non-binding pledge format. And why do we have that? Because that’s what the key players could agree on, not because Bolivia or the UAE scuppered an otherwise promising deal.

I tend to think that the argument about the difficulty of a global treaty is a bit of a smokescreen that stands in for opposition among the key players. If the US, EU, China, India, Japan, and maybe Russia/Brazil/Indonesia all agreed to a course of action and a way to divide emissions reductions amongst each other, Bolivia’s refusal or lack thereof would be pretty meaningless. It’s the fact that the US, EU, China, and Japan can’t agree that repeatedly torpedoes significant action. It’s probably true that the general static produced by all the secondary and tertiary players makes things harder on the margins*, but I doubt it’s a really decisive problem.

Similarly, I've heard it argued that there are complicated treaty formats that could work if we chopped the number of players involved down to 5-10, but otherwise get too complicated. I find this more convincing, but I'm still not convinced it's a decisive problem - at least in the climate case. My intuition is that a complicated treaty format will be no more workable for 10 countries than would be for 200.

Wednesday, May 25, 2011

The stupidest debate in climate negotiations?

In 2009 there was, seriously (hell, there probably still is) a debate over whether we should stick with 1990 as an index year for emissions cut promises, or change to 2005 as an index year.

This is a deeply stupid debate. The climate change problem is an absolute problem. To fix it, you have to reduce the amount of carbon (equivalents) going into the atmosphere by an absolute amount. The only thing changing the index year does is affect how impressive your cut sounds. Saying "we'll target emissions 20% lower than 2005!" sounds a lot better than saying "we'll target emissions 5% lower than 1990!" But the effect on the atmosphere is exactly the same. A given pledge translates to a given absolute number of tons of carbon going into the atmosphere, which gets you a given amount of the way toward where we need to be to not all collapse in a crazy-weather apocalypse. The index year is fundamentally window-dressing - just shorthand for "how many tons of carbon we were each emitting at an arbitrary point."

The question of why governments do this kind of thing in negotiations (argue over what amount to cosmetics, when both sides are clearly fully capable of doing the underlying math) and whether it makes any real difference is actually a going concern amongst those who study international relations. It seems clear to me that in this case the point is largely to confuse the issue ("20%? Are they talking relative to 1990 or is this one of those new 2005 pledges?") and hope it creates a PR win for you ("20%? Gosh, that's just as much as those climate hawk Europeans are promising!" The European pledge being a 1990 pledge, of course.)

Tuesday, May 24, 2011

Copenhagen 2009 [Part 1]

I'm almost halfway through 2009 in news reading, though this is less than a quarter of the way through the actual set of news articles I need to read, since articles are, not surprisingly, clustered around the actual UNFCCC meeting in December.

So far no great revelations. Just a couple of thoughts:

1) Russia has really been the dog that hasn't been barking. I've come across several articles that mention them being expected to play a disruptive role (in amongst lots of hope and hype about the US and China coming to the table to make a deal). But they didn't, as I recall. Nor did they, I think, at Cancun the next year. I guess they don't really need to, given everything that's happened; there were plenty of other nations willing to be disruptive instead. Still, I sort of expect Russia to act like a bull in a china shop even when it doesn't have to, so I feel mild surprise at its discretion.

2) You know, China really telegraphed its punches with regard to Copenhagen. Here were China's demands, issued in mid-May 2009:
--rich countries cut greenhouse gases by 40% relative to 1990 levels by 2020
--poor countries continue making only voluntary contributions
--developed countries be legally bound to give at least 0.5 - 1% of their annual economic worth to help poorer countries cut emissions and cope with global warming

There wasn't a snowball's chance in hell of any of this happening. It was so ridiculous that everyone just assumed they were talking crazy as an opening offer tactic. But hey, it turned out that China really wasn't willing to sign anything reasonable in Copenhagen, and in retrospect, maybe that's what people should have started worrying about after they made a totally unreasonable opening bid. I think people didn't because for the prior year, there'd been a lot of discussion about how China was starting to take this stuff seriously and setting a bunch of internal energy targets. People took this as a sign that China was coming around on emissions, even if they were still talking tough and didn't want to make external commitments.

What people didn't understand, I think, was that China's internal energy targets, though they do result in lower emissions, aren't about emissions. They're primarily about reducing China's energy intensity enough that its new power plant building can keep up with the exploding power needs of its population; and secondarily about ameliorating China's particulate pollution problems. Emissions were a distant third priority in this equation, and still are.

3) I wonder if the US didn't help create that bad negotiating outcome, though, inadvertently. There was all this hype about how with Obama in office, the US was really going to start doing stuff now. Less than a week after China made the above ridiculous opening bid, Secretary Chu got up in front of a big pre-summit meeting in Copenhagen and told everyone that the US was going to have to start leading on climate change and not worrying about whether China was cooperating or not. I was there, so I know a senior Chinese delegate was also there to hear this (and I know said Chinese delegate made a really uncompromising speech of his own at the same meeting). Did this look like a response, to the Chinese? I just wonder if the Chinese thought that with Obama in office making big promises, and his delegates making statements like that, the US was going to start behaving like the Europeans had at Kyoto, willing to sign treaties that bound only the developed nations to set reduction targets.

Monday, May 23, 2011

Tools and expectations

My most recent scholarly enterprise has been to read Ruggie's (1982) article on liberal economic regimes ("International Regimes, Transactions, and Change: Embedded Liberalism in the Postwar Economic Order"). It's a very well-known article; my advisor felt this would be useful because he thinks my work should be able to respond to Ruggie's model and wanted to know if I was envisioning something similar. My short response is, not entirely; Ruggie is talking about very deep-level, slow-changing stuff like norms and ideas about the proper role of governments in the economy, and how those shape economic regimes. The level I'm looking at is maybe one level up, having to do with ideas about best practices and expectations around industrial development and effects of treaties on markets.

The paper's still pretty interesting, though. Ruggie is responding to a wide-spread viewpoint of international economic history that posits an oscillation between liberalizing and protectionist impulses: beginning with liberalization in the late 1900s, proceeding through protectionism, the world wars, a return to liberalization after WWII, and then a swing back to protectionism around the 1970s.

Ruggie argues that in fact there is no disjucture between the early postwar period and the 1970s and after; rather the key shift is from the laissez-faire liberalism of the late 1900s to what he calls "embedded liberalism" in the post-War period. Yes, says Ruggie, both are basically liberal in that they both view a multilateralist international market with relatively free trade as desirable and appropriate. The difference, however, is that by the post-War period, nations had come to believe that the role of the government was not just to ensure the free operation of the market, but also to ensure economic stability domestically. Thus, the postwar economic order had to be one that provided both - the (relatively) free market and the tools needed to ensure relatively stable domestic economic conditions. Ruggie then argues that the "new protectionism" that emerged later on doesn't represent a change in what people want (from liberalism to protectionism) but rather a change in the instruments needed to ensure domestic stability in the face of liberalism (while the US had done a lot of what was necessary in the first few decades after WWII, the erosion over time of its economic hegemony meant that other nations increasingly needed new tools at their disposal to manage - not reverse or freeze - the effects of liberalism).

What I think is interesting is that a lot of today's economic rhetoric, especially from the right, boils down to a demand to return to the tools, the instrumentalities, the structure of pure liberalism seen in the first period of liberalism, in the late 1900s. But this doesn't address the fact that the expectations haven't changed back such that these tools would make sense. Citizens still expect their governments to provide domestic economic stability and manage the economy so as to avoid sudden large adjustments, and get angry if they don't. In other words, they still have the expectations of an embedded liberalism world. We certainly can change the tools we use or the structure of liberalism we pursue. But Ruggie's point is that when the tools pursued are out of whack with the expectations about what governments are supposed to provide - as they were also in the inter-War period - bad stuff happens.

Next up: I have to go back and do a dive into the narrative of COP-15 (Copenhagen) the way I did for Cancun. This is what I get for not doing it back in 2009. But things are always boring until you know exactly why and what you need to know about them, and one of my worst character flaws is poor motivation to do boring things!

Sunday, May 15, 2011

The Army and You! (and Your Energy)

In case you've recently found yourself wondering, "Self, I wonder what the relationship between the Department of Defense and green energy is?", allow me to introduce you to:

Lean, Mean, and Clean: Energy Innovation and the Department of Defense

which is a report by an outfit called the Information Technology and Innovation Foundation - an organization currently winning on titles in my book. Well, report titles, anyway. "Information Technology and Innovation Foundation" is sort of blah.

Fun facts from the article:
1) The federal government consumed 1.6 quadrillion BTUs (quads) of energy in 2007. The DoD accounted for 1.1 quads, or more than 70%. This makes DoD the largest single user of energy on the planet, roughly equal to the entire economy of Oregon. Yowza. (I know you're wondering what the second biggest government agency consumer is. It's the USPS.)

2) The biggest single driver in the DoD is the Air Force, with a little over half.

3) With such a huge energy consumption, the military is quite concerned over the impact on its operations of rising fuel prices and increasing shortages of fossil fuels (as oil production lags relative to increasing global demand).

4) The average amount of fuel used per soldier has increased 4-fold from WWII to now. This creates huge supply chain issues. 70% of the tonnage shipped by the Army for battlefield purposes is fuel. Fuel supply convoys are really nice targets. Guarding fuel supply convoys is a serious operational drain.

5) Things the military is looking into include green fuels for airplanes, aviation fuel efficiency, net-zero installations, a "Great Green Fleet" strike group (whatever that means), energy use monitoring, renewable resource prediction software, batteries, microgrids, solar and geothermal power generation, and general increases in efficiency and operational use of renewable energy.

Bottom line: The DoD is doing what you might expect, which is to say making good little liberals nervous by considering energy independence a strategic goal and doing some investing to try to assure it (good! sensible! how can we be wrong if even the ARMY is on our side!) because not attaining it might a) make us go to war, and b) interfere with the military's ability to do its job while at war which, it can't be denied, might include killing people (uh...).

Actually, side note: as a good little liberal, I do find the framing of military thinking suggested in this report a little troublesome at a higher level. It's one thing for the military to invest in technology to pursue operational energy independence - powering tanks with solar rather than oil so as to reduce supply chain issues seems like exactly the sort of thing the military might (and should) want to do if it could. That's a perfectly reasonable operational-level framing. To be fair, that is the bulk of the content of this article. But the framing of the article -  the introduction, the background - is much more about grand strategy and national-level concerns. The implicit argument seems to go, "Oil problems can make us go to war. War is the military's business. Therefore it is the military's business to be thinking about energy independence at the national level." And I'm not sure I agree on that. The military ought to make strategy, but it should not, it seems to me, try to make grand strategy - even if I happen to agree with the grand strategy in this case.*

But perhaps I should shut my mouth and be grateful to anyone who wants to increase the renewable energy research funding pie. I actually think most of what the military's thinking is pretty unobjectionable; the initial framing of the article just rubbed me the wrong way.

* Note that that's the framing chosen by the research organization, so I don't really know how the military prioritizes these different levels of thinking internally. They have quotes supporting from generals about the grand strategy stuff, but for all I know that's just stuff generals have said at coffee party chats.

Wednesday, May 11, 2011

Playing musical chairs with emissions

Here's an interesting milestone: a major developing country is exporting its emissions to a major developed country.

Usually it's the other way around: developed countries export emissions to developing countries. The classic example: as energy-intensive manufacturing industries like steel and aluminum migrate from developed countries to China, to be replaced by, say, services or IT industries, the overall energy used per unit GDP in the developed country goes down, while the overall energy used per unit GDP in the developing country goes up.

However, China has partially reversed the flow, at least in one instance. It's importing liquified natural gas (LNG) from Australia. That natural gas reduces China's energy intensity, to the extent that power generated from that natural gas would otherwise be generated from coal, which is a much dirtier fossil fuel. However, producing the LNG releases carbon into Australia's atmosphere, increasing Australia's total carbon emissions. Voila! China has exported some of its emissions.

(If I'm understanding correctly, the process to prepare, chill, and ship the LNG also significantly increases the total lifecycle emissions of the natural gas as a fuel.)

Tuesday, May 10, 2011

Negotiating power in climate change

What constitutes power in a climate negotiation? Assuming you define power as the ability to make other people do what you want, power in climate negotiations is actually a bit tricky. Pretty obviously, no one is going to go to war to enforce a climate goal, so military power is out. Economic power could conceivably be applied, but it almost certainly won't; the developed countries who are the most important backers of climate change deals probably do have enough economic clout to influence decision-making, but they seem to have largely agreed that their commitments to free trade agreements tie their hands in this area (or they've decided wielding economic power isn't worth the potential payoff, and are using free trade as an excuse; it's unclear to me. Maybe a little of both.)

One thing I'm sure about: if you want to have more clout in climate negotiations, start emitting more. Build as many coal-fired plants as you can, and make them as dirty as you can. Flare off natural gas fields. The bigger the share of the emissions pie you have, the more people have to pay attention to you, because the more difficult it is to solve the problem without you.

It's a limited kind of power, though. For instance, you can't use it to make other people do emissions reductions instead of you. You only have power to the extent that you're willing to reduce emissions; if you're just not willing to do that, you aren't part of the solution either way, and you don't matter. If you're individually big enough, you might in effect have veto power over solving the problem at all, but you don't have the power to make other people solve it for you.

You do probably have the power to dictate the form that solutions could take, though. China is currently the biggest individual emitter. If China decided the world should solve the climate change problem, and that the world should do it, for instance, with an emphasis on solar rather than wind, or on efficiency rather than renewables, I'd bet it could exercise some real influence on that aspect of climate deals.

China doesn't seem to be thinking that way, yet, though. China is still backing the Kyoto Protocol (because right now Kyoto essentially puts all the onus on developed countries to solve the problem), and the interesting thing about the Kyoto Protocol is that it doesn't give much latitude at all for negotiating about how to solve the climate problem. It's almost entirely consumed with who's going to solve how much of the problem - the central negotiating problem of the Kyoto framework is working out individual countries' commitments to specific country-level targets; implementation is left to countries to decide. (There are some parallel negotiations on specific issues like deforestation and technology transmission that are to some extent exceptions, but they haven't in my opinion become central enough to change my analysis here.)

I tend to think we'd have taken a major step forward if China would get to the point of accepting that it will, over time, need to make major emissions reduction steps, and therefore the question is how emissions cuts will be accomplished and what global strategies for reduction it can benefit from the most.

Friday, May 6, 2011

Nuclear craziness

In other random news, this article claims to be all about how Germans are reacting particularly strongly to the Fukushima Daiichi crisis by becoming more concerned. But I'm torn: wouldn't you say it's more interesting that 7 or 8 percent of Germans apparently became less concerned about nuclear after Fukushima, more than any of the other nations profiled?

Anyway, the same survey finds that Americans are the most supportive of nuclear power - 43% in favor vs.  24% opposed. That's more favorable than the French (36%/36%), and the French have been getting pretty much all of their electrical power from nuclear for ages now.

It turns out technology changes

It's very hard to make policy for green energy. Take the Brits and solar: the Brits approved a feed-in tariff designed to support solar installations by guaranteeing them a certain level of payment for power generated by solar. The feed-in tariff, which was  was calculated based on certain assumptions about the return that would be generated given the tariff level set. That return wasn't expected to be interesting to large-scale commercial investors - the target for the subsidy was really supposed to be smaller installations like households and small businesses - so the returns generated by user installations would be small enough in aggregate for the government to handle paying for.

But technology changed in the meantime, making returns more attractive; the feed-in tariff now represented a commercially interesting opportunity for business; and a bunch of larger projects threatened to soak up all the funds designated for the feed-in tariffs. Problem.

This doesn't mean you shouldn't try to make policy. After all, with no feed-in tariff, you don't get either big or little installations; you just get nothing. Rather, it means two things. First, somehow you have to find the political will to get over inevitable bumps. And second, you have to try to think out policy that can adapt to a range of possible outcomes, which involves a level of sophistication that is... difficult... in an ordinary political environment.

Ethanol, coals to Newcastle edition

The major U.S. subsidy supporting the ethanol industry looks set to go away. Which is good, since when you're exporting ethanol to Brazil, you are no longer an industry that needs support.

Brazil is a fascinating case, I've been learning. Around 40% of Brazilian energy use is renewables, which is pretty high for anyone, and really crazy high for a developing country. Of course, it's ethanol, which is a questionable renewable. Moreover, it's all moot, because 50% of Brazil's emissions come from deforestation alone.* Brazil, therefore, is the one developing country that's in the position of being a good way toward doing something serious about its energy emissions problem - and also one of the few for whom that doesn't mean nearly as much as it could.

* In case you're wondering, there isn't a direct connection between Brazilian deforestation and ethanol. Sugar cane is grown in a part of Brazil that was deforested long ago, and doesn't tend to be grown in the areas being deforested today. There may be some indirect land use effects, though - that is, crops being grown on currently deforested areas that would be grown in the area where sugar cane is being grown, if sugar cane weren't crowding it out.

Wednesday, May 4, 2011

You guys, it was so easy to be a political scientist in the 80s. Structural realism still reigned supreme, and so you could get stuff like this:

The prevailing model postulates one source of regime change, the ascendancy or decline of economic hegemons, and two directions of regime change, greater openness or closure. If, however, we allow for the possibility that power and purpose do not necessarily covary, then we have two potential sources of change and no longer any simple one-to-one correspondence between source and direction of change.
Ruggie, 1982. "International Regimes, Transactions, and Change: Embedded Liberalism in the Postwar Economic Order." International Organization, 36 (2).

Did you get that? He's basically saying, "So previous literature all assumes that regime configuration has entirely to do with what's happening to the hegemon's power. But I think that we can explain more complex outcomes if we assume that it's not just what's happening to power but also what people want to do with the power.

That's the kind of ideas it took to get published in the 80s.

(Not to say that Ruggie's paper isn't good and useful. It is - there's also a lot more too it than just that assertion. It's just there was a lot of basic spadework that hadn't been done in the 80s.)

Tuesday, May 3, 2011

Venture capital

China might be developing a green business constituency, but what about the US?

The American green business story has been dominated (in terms of PR, in any case) by venture capital, centered in California. Venture capital isn't necessarily the best model for funding renewable energy experimentation, for a variety of reasons, but it's an important part of the US investment landscape and it's where things have ended up centered around here. There were a bunch of news articles about it today, and it's a bit of a mixed bag.

This article reports that VC cleantech investment is up 54% over all from last quarter. (California got 56% of it, which is a majority, but less of a majority than last year. Relatively speaking, the southeast is growing faster than California, apparently.) That sounds kind of nice.

The same article also notes that energy efficiency dipped by 49%. That's not so nice. Energy efficiency is probably better suited to the VC investment model than a lot of the renewable energy technologies. It might be bad for the world, too. Efficiency isn't as sexy as something like solar, but it's an area with more low-hanging fruit in terms of fast emissions cuts. On the other hand, it's also a more mature field, so maybe it needs less VC right now.

Investment in storage is up, which is probably good for the world. Storage is one of those technologies that's key to making lots of other strategies work.

Finally, this article notes that generalist VC funds seem to be pulling back from cleantech; ongoing investment is largely driven by either cleantech-focused funds or follow-on investments in things generalist funds had already committed to. The article sums up the problem: "These 10 [generalist] firms (see table at the bottom) seem to have given the grand cleantech investing experiment about five years, and then realized it wasn’t for them — or at least wasn’t making them enough money at a fast enough rate. As most people who follow cleantech investing know by now, the timelines to exits and acquisitions seem to be consistently longer and require more capital than investing in information technology." Cleantech-focused firms, however, are "doubling down."

What makes this really interesting, though, is this: "There are also new firms emerging specifically focused on cleantech investing that are ready to learn lessons from the past and also structure deals in new ways. The article points out WindSail Capital, which plans to issue secured notes for cleantech startup assets, and is structured more like a hedge fund." This is something people have been talking about - and I've been wondering about - for a while. Given the fact that lots of conventional cleantech is difficult for general VC to grapple with successfully, everyone discusses that fact that "new investment models" are needed for cleantech. Are we finally at a point where we're going to be able to start talking about what those are and what works best, based on actual experimentation?

Monday, May 2, 2011

Reversal of interests

Raustiala and Victor (2004) describe an interesting reversal in position on the part of developing countries in the negotiations (spread across multiple international fora) around protection of plant genetic resources (PGR) - that is, plant IP.

The position of developed countries stayed pretty constant throughout: they were (on behalf of their plant biotech industries) in favor of strong IP rights for what's called "worked" PGR, plant genetic material that's the product of deliberate human manipulation, and generally also for loose rules on the protection of raw PGR, which forms the basis for the creation of worked PGR, and is thus essentially an input.

Developing countries, however, went from being against pretty much any form of PGR IP protection to being fairly strongly for it, in the course of about a decade. Raustiala and Victor describe this as the result of the relatively sudden recognition of a new threat/opportunity: during the same period that PGR protection was being debated, there was also rising pressure on developing countries to halt deforestation and protect forests, which they saw as an intrusion on their sovereignty. This battle led to an effort to quantify the value of forests, including their value as a source of raw PGR. Environmentalist groups encouraged developing countries to combine their impulses to assert sovereign control over forests with a conservation motive, by encouraging them to see forests as a source of valuable raw IP that they could both assert sovereignty over and protect. Suddenly, developing nations too had a stake in some kind of IP protection regime that guaranteed them rights to raw IP in their territory. This isn't the precise kind of IP protection developed nations wanted, but with both sides now interested in some kind of IP deal, so there was room for mutually productive deal-making.

It's interesting because something similar happened in the law of the sea treaty negotiations as well; negotiation was kind of stalled until a couple of shifts took place, one of which was the sudden recognition by developing countries that they had an interest in a treaty because they could use it to guarantee their right to profit from deep-sea mineral exploitation.

It doesn't seem, thus far, that either hope has really panned out all that well. But they both got deals moving at the time.