Guest post by Gail Tverberg of Our Finite World:
They say that every cloud has a silver lining. If future energy
consumption (which is mostly fossil fuel) drops because of a financial
collapse brought on by high oil prices and other limits, then, at least
in theory, climate change should be less of a problem. One of the
important variables in climate change models is the amount of carbon
dioxide from the burning of fossil fuels that enters the atmosphere. In a
recent post (Peak Oil Demand is Already a Huge Problem), I showed the following estimate of future energy consumption.
I explained in that post that oil limits are different from what most people expect. Oil limits are price limits.
Indirectly because of these price limits, fuel consumption of all sorts
(not just oil) will decline in the near future. The problem will be
greater job loss and an inability to afford products of
many kinds, including those made with fossil fuels. Financial collapse,
particularly of governments, and a long-term decline in population are
also part of this scenario.
My estimate of CO2 generation by fossil fuels in the 21st century is
only about one-quarter of the amount (range midpoint) assumed in the
2007 Intergovernmental Panel on Climate Change (IPCC) Report. When
differences in estimates of an important variable are this far apart,
one starts reaching the “Garbage in, garbage out” problem. This is a
persistent problem for all modelers. Even if the climate model is
perfect apart from its estimate of future CO2 fossil fuel use, and even
if anthropogenic issues are implicated as a cause of recent climate
changes, the model with its incorrect estimate of future fossil fuel
energy consumption can still be unhelpful for determining needed future
A comparison of energy consumption estimates is shown in Figure 2. My
estimate of energy consumption (similar to that in Figure 1) is shown
as the Collapse scenario.
Figure 2 Explanation
The Collapse Scenario in Figure 2 is my estimate of
future energy consumption, using amounts similar to Figure 1 of this
post. It is based on the assumption that financial limits are what
brings down the system. As the system is brought down, our capability to
provide many basic services, such as our ability to maintain roads and
electric transmission lines, disappears. Thus, we become unable to
maintain the complex systems needed to extract oil and gas and coal, and
because of this, are unable to maintain current energy supplies. Even
renewables will become a problem, because we need fossil fuels to create
new renewable energy generation. We also need fossil fuels to maintain
the lines used to transmit the electricity, and to provide back-up
If the problem we are facing is financial collapse, biomass can be
expected to behave differently than other renewable energy resources. If
people are poorer, there will be great demand for wood for heating, and
perhaps for creating metals and glass. In fact, there is evidence that Greece is turning to wood burning already.
(Greece is an early example of a country approaching the financial
problems we expect world wide.) Thus, under the Collapse Scenario, a
likely problem is deforestation.
The Peak Oil Scenario shown in Figure 2 is based on a 2013 estimate by the Energy Watch Group. The assumption in estimates using “Peak Oil” ways of evaluating supplies is that geological constraints
determine supply. The question of price doesn’t come into the analysis;
instead curve fitting techniques are used. If oil supplies decline, the
assumption is made that natural gas and coal extraction will to some
extent rise to offset the oil decline.
Many who support the peak oil method of calculating expected
availability of future fuel supplies are advocates of a ramp-up of wind
and solar PV. One reason use of these resources is supported is because
fossil fuels are seen to be limited, and renewables might act as “fossil
fuel extenders”. I personally am concerned about adding intermittent
renewables to the grid in large quantities. Doing so is likely to shorten the lifespan of the grid, if the intermittent renewables introduce greater cost and complexity.
I believe that peak oil estimates are overstated because they do not
consider the economics of depleting fossil fuel supplies. Oil
consumption by importers starts to decline if price is high–something
that happens long before world oil supply actually starts to decline.
James Hamilton has shown that 10 out of 11 US recessions since World War II were associated with oil price spikes.
(Recession tends to lead to less consumption of many products,
including oil.) At the same time, oil exporters need high prices, and
have financial problems if price or production declines too much. If
exporters do not get enough revenue from oil exports, some of them
collapse. See my post How Oil Exporters Reach Financial Collapse.
The Climate High and Climate Low estimates are based on carbon amounts shown in Figure 1 of this 2008 Oil Drum post by De Sousa and Mearns.
In converting these carbon estimates to energy consumption estimates, I
implicitly assumed that the carbon intensity of energy use would remain
unchanged–that is, improvements resulting from more use of natural gas
and renewables use would be offset by increases in coal consumption.
This assumption is probably not what the IPCC would make. Their “Low
Estimate” would probably assume greater use of renewables and natural
gas than their High Estimate, so that the actual energy available in
their Low Estimate would be closer to the energy available in their High
Estimate than what my graph would suggest. The 2007 IPCC report does
not give much detail, except to generally discuss their reasoning.
The IPCC’s basic assumptions seem to be:
1. Demand is the basic determiner of supply. In the view of the IPCC, there is lots of oil, gas, and coal in the ground (see Figure 4.2 of Working Group III Report).
It is assumed that we can get these fuels out, essentially as fast as
we want. No consideration is given of diminishing returns, and the
resulting likely run-up in both needed investment funds and price to
the user. (See Our Investment Sinkhole Problem.)
2. Because the IPCC report misses the issue of diminishing returns
and resulting higher price, it assumes that demand can keep on ramping
up pretty much indefinitely. In the real word, demand is what customers can afford to buy. This is already declining for the US, Europe and Japan, with the high oil prices experienced in recent years.
Overview of IPCC 2007 Report
As I see it, there are three important aspects of the 2007 IPCC analysis:
1. The Climate Model. This is the part of the report
that says, if CO2 is such and such, and other forcings are so much, the
effect on the climate is this amount. I personally do not have
expertise to evaluate this part of the report. I note, however, that at
least some climate scientists seem to be back-pedalling on how much
impact is expected from a given amount of carbon. A letter published in
Nature Geoscience on May 19, 2013, titled Energy Budget Constraints on Climate Response
indicates that the climate effects of a given set of forcings seems to
be lower than the 2007 IPCC report suggested. This letter, together with
explanatory information is available free for download, with
2. The Estimates of Fossil Fuels going into the Model.
It is this part of the model that seems to be seriously in error. The
carbon added during the 21st century in the Collapse Scenario is only
about 25% of what the IPCC estimates use (averaging the high and low) . De Sousa and Mearns calculate that their Peak Oil estimates would
keep CO2 emissions below 450 parts per million. My Collapse Scenario
estimates are considerably below De Sousa and Mearn’s Peak Oil
estimates, so would in theory produce lower yet CO2 impacts.
3. What to Do About the Problem. I think this part of IPCC report has a serious problem as well. The report, as it is published, is not about How to Reduce CO2 Emissions.
If this had been the goal, the report would likely have talked about
reducing population, eating less meat, making manufactured goods that
last longer, and standardizing goods, so that it is not necessary to buy
new goods, just replacement parts.
Instead, the IPCC 2007 report
provides a wish list of ways we might keep Business as Usual (BAU)
going, using techniques that might reduce fossil fuel use with little
pain to the business community and consumers.
A big part of the problem with the analysis of what to do about the
problem is that the researchers putting together the analysis do not
understand the way the current system works. According to Newton’s Third Law of Motion,
“For every action, there is an equal and opposite reaction.”
Unfortunately, there is something very similar when one tries to make
energy substitutions. A researcher might assume that substitution of
higher-priced renewable energy for lower-priced fossil fuel energy would
reduce world carbon emissions, but this is true only if second and
third order effects don’t undo the supposed benefit. Higher-priced fuels
make a country less competitive in the world marketplace, and give an
advantage to countries using coal for their generation. Adding a carbon
tax has similar unplanned effects.
When we look at actual CO2 emissions, we find that they have risen
remarkably since the Kyoto Protocol was ratified in 1997 (Figure 3,
above). (See my posts, Twelve Reasons Why Globalization is a Huge Problem and Climate Change: The Standard Fixes Don’t Work.)
One of the implicit assumptions in the IPCC report is that continued
growth in a finite world makes sense, and can be expected to continue
until 2100. In fact, we are reaching limits of many kinds.
In fact, modelers should be considering all of the limits
simultaneously. Modeling any one limit on Figure 5 by itself will
produce results that will suggest that that limit is a huge problem,
that perhaps can be fixed. To a significant extent, there are
workarounds for many of these problems, including more research on
antibiotics, desalination of water, and intermittent renewables to
substitute for some fossil fuels. The problem with each of these
workarounds is that they all involve higher cost, and thus tend to
create financial problems, especially for governments that try to fix
the problems. Thus, the real issue is a likely near-term financial
problem. This financial problem can be expected to lead to economic
shrinkage which will by itself help mitigate several of the problems,
including climate change.
Given the multiple limits we are reaching, I think we need to step
back. Energy is truly needed to create products and services of all
kinds. The IPCC is claiming that with a few tweaks, economic growth of
the type we have grown to expect can continue until the year 2100. This
assertion is clearly false, with or without the tweaks they are
We need to be figuring out how to live with a world that is rapidly
changing for the worse, in terms of energy availability. I am not sure
climate change should be our Number 1 concern, because the CO2 part of
the problem is likely to mostly take care of itself. Instead, we need to
be looking at how we can make the best use possible of energy sources
we have. We also need to be cutting back on the real source of
Perhaps we need to be thinking about different options than we have
been thinking about to date–for example, making supply chains shorter
and bringing production closer to the end-user. We might want to make
such a change in an attempt to sustain production for longer, whether or
not this has an adverse CO2 effect, viewed from today’s peculiar
perspective: Only manufacturing which results in local CO2 production
seems to be viewed as “bad;” exporting coal to China, or importing goods
manufactured using coal from China/ India is not viewed as a problem.
Having economists with a mindset of BAU forever and helping businesses
get ahead, doesn’t necessarily produce the best results from the point
of view of taking care of the existing population. Perhaps we should be
looking at our current problems from a broader perspective than the IPCC