Climate Change and Pascal’s WagerBy Jason Peters for FRONT PORCH REPUBLIC
Rock Island, IL
I remember the summer of 1988. The golf course I worked on (and on which, when all was said and done, I would work a dozen seasons) suffered considerably from an uncommon heat, as did all of us on the crew. (The mama’s boys in the pro shop weathered 1988 just fine.) Tuesdays and Thursdays weren’t busy mowing days for us, so I spent most of them with my head in a hole about eighteen inches deep—and sometimes deeper.
I learned most of my plumbing doing subterranean irrigation repair.
Bill McKibben was paying attention in 1988 and hard at work on The End of Nature, one of the first books on global warming written for a popular audience.
Having lived (and worked) through 1988, I was drawn to the book. I read it with horror but also with skepticism. Skepticism is necessary.
Twenty-four years after that attention-getting summer, McKibben has a sobering piece in Rolling Stone on the current state of climate science. And if what he has to say is true, the news on global warming (Wes Jackson calls it “rapid global climate change”) is worse than grim. I’m going to quote at length, because I’m sure too few people will read McKibben’s article.
McKibben begins thus:
June broke or tied 3,215 high-temperature records across the United States. That followed the warmest May on record for the Northern Hemisphere – the 327th consecutive month in which the temperature of the entire globe exceeded the 20th-century average, the odds of which occurring by simple chance were 3.7 x 10-99, a number considerably larger than the number of stars in the universe.
He draws our attention to three numbers. The first is 2° Celcius. “The official position of planet Earth at the moment is that we can’t raise the temperature more than two degrees Celsius – it’s become the bottomest of bottom lines. Two degrees”:
scientists estimate that humans can pour roughly 565 more gigatons of carbon dioxide into the atmosphere by midcentury and still have some reasonable hope of staying below two degrees. (“Reasonable,” in this case, means four chances in five, or somewhat worse odds than playing Russian roulette with a six-shooter.)
But the problem is that we’re nearer 565 gigatons–the second number McKibben wishes to bring to our attention–than we think:
study after study predicts that carbon emissions will keep growing by roughly three percent a year – and at that rate, we’ll blow through our 565-gigaton allowance [not by midcentury but] in 16 years, around the time today’s preschoolers will be graduating from high school. “The new data provide further evidence that the door to a two-degree trajectory is about to close,” said Fatih Birol, the IEA’s chief economist. In fact, he continued, “When I look at this data, the trend is perfectly in line with a temperature increase of about six degrees.” That’s almost 11 degrees Fahrenheit, which would create a planet straight out of science fiction.
But science fiction is complicated by the third number McKibben draws our attention to: 2,795 Gigatons, a number that
describes the amount of carbon already contained in the proven coal and oil and gas reserves of the fossil-fuel companies, and the countries (think Venezuela or Kuwait) that act like fossil-fuel companies. In short, it’s the fossil fuel we’re currently planning to burn. And the key point is that this new number – 2,795 – is higher than 565. Five times higher.
I repeat for emphasis: it’s fossil fuel we’re currently planning to burn, which means we’ll burn it, which means its carbon is as good as launched into the atmosphere. And it exceeds our allotted limit by five times.
Five times means five times more, not five times less, than we should burn.
The Carbon Tracker Initiative – led by James Leaton, an environmentalist who served as an adviser at the accounting giant PricewaterhouseCoopers – combed through proprietary databases to figure out how much oil, gas and coal the world’s major energy companies hold in reserve. . . . If you burned everything in the inventories of Russia’s Lukoil and America’s ExxonMobil, for instance, which lead the list of oil and gas companies, each would release more than 40 gigatons of carbon dioxide into the atmosphere.
Which, says McKibben, is why 2,795 gigatons is “such a big deal,” offering then an analogy for you hard drinkers:
Think of two degrees Celsius as the legal drinking limit – equivalent to the 0.08 blood-alcohol level below which you might get away with driving home. The 565 gigatons is how many drinks you could have and still stay below that limit – the six beers, say, you might consume in an evening. And the 2,795 gigatons? That’s the three 12-packs the fossil-fuel industry has on the table, already opened and ready to pour.
How bad is it? We’re screwed. We won’t run out of oil and coal fast enough.
We have five times as much oil and coal and gas on the books as climate scientists think is safe to burn. We’d have to keep 80 percent of those reserves locked away underground to avoid that fate. Before we knew those numbers, our fate had been likely. Now, barring some massive intervention, it seems certain.
Here McKibben is especially prescient. Yes, the fossil fuel is still in the ground—technically.
But it’s already economically aboveground – it’s figured into share prices, companies are borrowing money against it, nations are basing their budgets on the presumed returns from their patrimony. It explains why the big fossil-fuel companies have fought so hard to prevent the regulation of carbon dioxide – those reserves are their primary asset, the holding that gives their companies their value. It’s why they’ve worked so hard these past years to figure out how to unlock the oil in Canada’s tar sands, or how to drill miles beneath the sea, or how to frack the Appalachians.
If you told Exxon or Lukoil that, in order to avoid wrecking the climate, they couldn’t pump out their reserves, the value of their companies would plummet. John Fullerton, a former managing director at JP Morgan who now runs the Capital Institute, calculates that at today’s market value, those 2,795 gigatons of carbon emissions are worth about $27 trillion. Which is to say, if you paid attention to the scientists and kept 80 percent of it underground, you’d be writing off $20 trillion in assets. The numbers aren’t exact, of course, but that carbon bubble makes the housing bubble look small by comparison. It won’t necessarily burst – we might well burn all that carbon, in which case investors will do fine. But if we do, the planet will crater. You can have a healthy fossil-fuel balance sheet, or a relatively healthy planet – but now that we know the numbers, it looks like you can’t have both. Do the math: 2,795 is five times 565. That’s how the story ends.
And now what?
According to the Carbon Tracker report, if Exxon burns its current reserves, it would use up more than seven percent of the available atmospheric space between us and the risk of two degrees. BP is just behind, followed by the Russian firm Gazprom, then Chevron, ConocoPhillips and Shell, each of which would fill between three and four percent. Taken together, just these six firms, of the 200 listed in the Carbon Tracker report, would use up more than a quarter of the remaining two-degree budget. Severstal, the Russian mining giant, leads the list of coal companies, followed by firms like BHP Billiton and Peabody.
McKibben points out the obvious consequence: this industry, and this industry alone, holds the power to change the physics and chemistry of our planet, and they’re planning to use that power.
They’re clearly cognizant of global warming – they employ some of the world’s best scientists, after all, and they’re bidding on all those oil leases made possible by the staggering melt of Arctic ice. And yet they relentlessly search for more hydrocarbons – in early March, Exxon CEO Rex Tillerson told Wall Street analysts that the company plans to spend $37 billion a year through 2016 (about $100 million a day) searching for yet more oil and gas.
Rex Tillerson, says McKibben, is the most “reckless man on the planet.”
Late last month, on the same day the Colorado fires reached their height, he told a New York audience that global warming is real, but dismissed it as an “engineering problem” that has “engineering solutions.” Such as? “Changes to weather patterns that move crop-production areas around – we’ll adapt to that.” This in a week when Kentucky farmers were reporting that corn kernels were “aborting” in record heat, threatening a spike in global food prices. “The fear factor that people want to throw out there to say, ‘We just have to stop this,’ I do not accept,” Tillerson said. Of course not – if he did accept it, he’d have to keep his reserves in the ground. Which would cost him money. It’s not an engineering problem, in other words – it’s a greed problem.
And, as we say on the Porch, it’s also a problem of limits.
But to say that we’ll adapt to “changes to weather patterns that move crop-production areas around” is to make a frigid diagnosis that can only come from the mouth of someone who doesn’t have to adapt. Tillerson won’t have to move his farm or his family or his productive operations somewhere else. He’ll merely prescribe the easy migration of others while he himself labors under the difficult task of getting his pork ribs at his local Fairway.
By way of remedy McKibben would have the oil, gas, and coal industries do as all of us do: pay to have their garbage hauled away:
Much of that profit stems from a single historical accident: Alone among businesses, the fossil-fuel industry is allowed to dump its main waste, carbon dioxide, for free. Nobody else gets that break – if you own a restaurant, you have to pay someone to cart away your trash, since piling it in the street would breed rats. But the fossil-fuel industry is different, and for sound historical reasons: Until a quarter-century ago, almost no one knew that CO2 was dangerous. But now that we understand that carbon is heating the planet and acidifying the oceans, its price becomes the central issue.
If you put a price on carbon, through a direct tax or other methods, it would enlist markets in the fight against global warming. Once Exxon has to pay for the damage its carbon is doing to the atmosphere, the price of its products would rise. Consumers would get a strong signal to use less fossil fuel – every time they stopped at the pump, they’d be reminded that you don’t need a semimilitary vehicle to go to the grocery store. The economic playing field would now be a level one for nonpolluting energy sources. And you could do it all without bankrupting citizens – a so-called “fee-and-dividend” scheme would put a hefty tax on coal and gas and oil, then simply divide up the proceeds, sending everyone in the country a check each month for their share of the added costs of carbon. By switching to cleaner energy sources, most people would actually come out ahead.
There’s only one problem: Putting a price on carbon would reduce the profitability of the fossil-fuel industry. After all, the answer to the question “How high should the price of carbon be?” is “High enough to keep those carbon reserves that would take us past two degrees safely in the ground.” The higher the price on carbon, the more of those reserves would be worthless. The fight, in the end, is about whether the industry will succeed in its fight to keep its special pollution break alive past the point of climate catastrophe, or whether, in the economists’ parlance, we’ll make them internalize those externalities.
I’ve done a lot of outdoor manual labor this summer. Little of it has involved subterranean plumbing, but all of it has been in weather less comfortable than that of 1988, when I was half as old as I am now. But if, even now, I hold on to an element of skepticism, as I always do, I must also suggest that it might be time for a wager of the sort Pascal proffered. What’s the harm? What do we lose by getting behind McKibben? Total collapse?
Crazy people have been right about unthinkable shit. Read Night if you doubt this.