Arguing with economics.

Just in case it isn't obvious, I have climate change in mind when talking about classic economic thought being professed by conservatives.

I think that you can easily make the case even by "economic" terms.

Offshore drilling, fracking and using something like tar sands to get oil is extremely expensive compared to oil production costs lets say in Saudi-Arabia. Hence these technologies are basically just pushing the envelope on how to produce oil to more and more exotic ways and have basically just replaced depletion on the global scale. For example the UK has it's oil production in offshore drilling, so the following chart should be obvious.



Now, if investing in an alternative energy source that can compete in price in the future with fossil fuels and be cheaper, how wouldn't be also economically smarter to do that?

One can easily argue a lot of things in pure "market terms" or "price terms".

The cost of a getting a barrel of oil out of the ground has gotten more expensive. Drilling through the ocean floor costs more because of the rent on the drilling rig, the extra and more expensive labor, the time and materials it takes, and the cost of greater risk. Fracking is more expensive than drilling into a shallow well and sucking up sweet crude. So, why do they do it?

Because the world supply of petroleum is slowly getting smaller, and the average price is rising. As it rises, more expensive methods of getting oil become affordable.

Then there is the externality business. The fossil fuel industry has made itself very profitable by externalizing everything from pollution from drilling, shipping, refining, to using the product -- whether it be coal, oil, or gas.

Why do regulators let them get away with it? Because the economic might of the fossil energy industries is huge, and we are all dependent on a steady supply. Most governments are simply unwilling to take on the energy business in a frontal assault.

In order to understand how this works, the average citizen has to pay some sustained attention to the news, and do a little background reading. The popular mass news media do not, by and large, present a lot of information about all this. They do talk about the price of gasoline going up and down, but they don't really explain much. PBS does, but their programs tend to be an hour long (or maybe 90 minutes) which is a long time to pay attention. There are a few magazines that often do a good job of explaining this in ordinary language, but one has to go look for such magazines

Another factor is that most people (more or less correctly) do not see what difference they can make in the whole problem. A lot of people have almost no choice but to continue using energy (cars, gasoline, oil products, natural gas, electricity generated from coal, etc.) the way they always have. I can do without a car because I can't drive anyway and located myself where there is pretty good mass transit. I also use a bicycle. Millions and millions of people can't choose what I did because they don't live near mass transit, and they can't afford to move, and even if they did, it's tough raising children and doing all the things a family wants to do without a car, plus getting to work, getting to the day care center with young children, etc. etc. etc.

Still, things are changing.

Some states are on schedule to eventually achieve their long term goals of supplying their citizens with renewable energy. States like Minnesota have no coal, no oil, and no hydro electric resources worth mentioning. We do, however, have wind and sun. Wind generation is turning out to be a much better bet than solar for large scale electrical supply.

Unfortunately, a lot of the oil we use in the northern tier of states (and we use as much per capita as any body else does) comes from one of the dirtiest of all petroleum sources -- the oil sands of Alberta.

I don't know what will happen. I do know that Nature bats last, and we may end up being totally screwed.

Quoting Bitter Crank

Why do regulators let them get away with it? Because the economic might of the fossil energy industries is huge, and we are all dependent on a steady supply. Most governments are simply unwilling to take on the energy business in a frontal assault.

Don't underestimate the actual economic boom that the whole fracking/horizontal drilling revolution created to states like North Dakota. Two digit GDP growth is something that any state government would want to see.

To put it into context, here's a chart of how various US states GDP grew from the year 2000. Look at North Dakota, home of the Bakken oil field:

Yes, but the question remains that how does one address this insidiously 'common sense' talk about the economy professed by conservatives and classical economists in light of climate change?

Quoting Posty McPostface

So, how do you argue with this logic or 'common sense' economic rationale, which is being fed to the masses?

I guess it's a time issue. [I]When[/i] do you want your profits? If you want it in a short timespan invest in fossil fuels. If you're thinking long-term then invest in clean energy.

I think quickies are fun but they leave no lasting impression. Do they?

Quoting Posty McPostface

Yes, but the question remains that how does one address this insidiously 'common sense' talk about the economy professed by conservatives and classical economists in light of climate change?

1. Don't bother arguing with conservatives.

2. Put the hay down where the goats can get at it.

3. Tell the truth. If people don't believe it, then there is nothing that can be done.

• You and your children's futures really are at stake. Global warming and extensive pollution caused by fossil fuels are already here, and are big problems. But it's not too late to reduce severity.
• Oil companies do not care about your future. They never have, they never will.
• Oil companies put their own interests first. That always have, and they always will.
• Fight the oil and coal companies
• The best way to demand more efficient cars is to stop buying less efficient cars.
• Work on consuming less "stuff" that you don't really need. You'll be money ahead, and contribute to less energy waste.
• Individually you can do nothing. Joint with other people, join groups that already exist, or start groups that can make a louder noise than you can by yourself. There energy conservation battles to be fought in your neighborhood, your city, your county, your state, and in your country.
• Get acquainted with mass transit and use it whenever possible. Increasing ridership means more resources and better mass transit.
• Don't assume you will be dead before all this becomes a problem. If you are in your early 60s, for instance, there is a very good chance you will still be around when bigger hunks of shit are hitting the fan than what we've seen so far. It's up to this generation to decide how bad it will be for our children and grand children, let alone those who come after that.

Quoting Posty McPostface

Yes, but the question remains that how does one address this insidiously 'common sense' talk about the economy professed by conservatives and classical economists in light of climate change?

Explain to them the economic impacts of climate change?

Quoting Michael

Explain to them the economic impacts of climate change?

Why does that even require explaining, is my point? Isn't it intuitively obvious or am I missing something in their rationale?

In other words, why is there a conceptual gap in the rationale of the classical economist when confronted with their economic theory and the future ahead of us? You would think these were sincere and educated people, and surely know that climate change isn't just some hoax.

Quoting Posty McPostface

Why does that even require explaining, is my point? Isn't it intuitively obvious or am I missing something in their rationale?

Conservative climate change deniers are perfectly capable of understanding the economic impact of climate change. However, like most people, their heart is where their treasure is, and a lot of climate change deniers have a lot of treasure in the energy sector (that stands to lose if we decided to get real about climate change).

They can't just pivot away from coal, oil, and gas to solar panels, windmills, and nuclear power. Their asset values will fall if they don't defend fossil energy. To whom are you going to sell an old coal mine these days? Better to keep it going.

I have no sympathy with the prospect of energy stockholders losing money -- tough bounce, but they don't look at it that way.

Quoting Posty McPostface

And with a conservative for the matter...

How do you argue with economics?

I'm not a neo-classical economist, but I do think most neo-classical economists (and I think one needs the prefix 'neo-' nowadays) believe economic action needs to be taken urgently in response to climate change. So I think your argument is with a different beast.

I've attached to this post an article by Jaffe and Kerr from a couple of years ago which purports to be a book review but which I think is a good summary of the neo-classical economists' position. Put simply: there is an absolute limit to carbon emissions. Carbon has to be priced, either by emission permits or tax. This needs international agreement and drastic national action.

There are some enormous methodological problems to overcome.

Jaffe and Kerr:..we really do not have an analytically consistent method for adding up costs
and benefits across different generations and income groups...

So economists believe in counting and then compensating for 'externalities', but it's damned hard to count the implications well. Plus there may be 'tipping points' for the worsening of climate change which are impossible to predict well if at all.

I think your target is more the political elite right in the United States. They are heavily invested in fossil fuels and the 'doubt creation' industry they finance spreads among themselves. The authors and Nordhaus, the man they're reviewing, end by considering the conservative who

Jaffe and Kerr:....notices that many economists, including the vast majority of the professional economists who work for Republicans (again, consensus if not unanimity) favor a tax on carbon...

Does that conservative eventually see the light? I'm a distrustful old socialist so I fear not, but I still hope they do :) But I just wanted to set the record straight about 'economists': most of them, including ones I would virulently oppose on many things, aren't as myopic about climate change as all that.

Quoting Posty McPostface

Why does that even require explaining, is my point? Isn't it intuitively obvious or am I missing something in their rationale?

I think one can brush off the Trump-level climate deniers from any rational discussion, but the truth is that things are in reality complicated. Hence you do indeed need explaining.

Perfect example is Peak Oil. The conventional production of oil peaked years ago and is in steady decline. Oil production has increased, but not much in the last decades. Yet the most apocalyptic visions of what would happen when we get Peak Oil have been proven totally false and now look quite whimsical. Technological development and market mechanism make it so that Peak Oil didn't collapse our global economy.

And this the typical problem with things like taking into account global warming or environmental degradation: too simplified models and forcasts get it wrong as the things are actually complex. They might be great talking points, sure, but things usually are difficult. If the whacky conservatives make fools of themselves believing in their alternative facts, that doesn't mean that these things aren't complex.

Reply to mcdoodle

Thanks for the paper. I'll try and review it in my overabundance of spare time.

Reply to ssu And it's wrong to say we will pump every last drop out of the ground. At some point the energy required to get a barrel of oil out of the ground will exceed the energy contained in the barrel of oil, and that will be the end of the oil industry. That, however, may be some time off. But before then, the cost of pumping oil will gradually eliminate fields from production.