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Greenpeace Grossly Understates Value of Energy [R]evolution

by a siegel Thu Mar 12th, 2009 at 06:15:06 PM EST

Yesterday, in a very interesting session featuring Senator Bernie Sanders (I-VT), Sven Teske (Greenpeace), and Joe Romm (Climate Progress), Greenpeace released the latest in their series of Energy [R]evolution analyses.   This high quality report conducted by the German Aerospace Center lays out, using quite conservative estimates, how "the United States can meet the energy needs of a growing economy and achieve science-based cuts in global warming pollution - without nuclear power or coal." And, do so not just cost-effectively, but profitably.

Save the planet and make a profit.  Sounds great.  As Senator Sanders said, "We should congradulate Greenpeace for recognizing, as does President Obama, that amid the crisis is a great opportunity."

Even so, perhaps the most striking thing about this excellent study is what is missing.


For many Americans, Greenpeace is some 'loony, left-winger, enviro-extremist' group, known for direct action like being out in small boats, in rough seas, disrupting whale fisheries or climbing coal plants to hang signs.  This report comes from what many in the US view, quite incorrectly we should add, as some form of "environmental extremists" and yet ... and yet ... these "extremists" have issued an extremely conservative report that quite significantly understates the real value of pursuing the path that they outline.

What is missing?

   


  • The avoided costs from catastrophic climate change (whether disasters, refugees, agricultural disruption, infrastructure destroyed by rising seas, etc ...).

  •    
  • The avoided costs from reduced acidification of the oceans.

  •    
  • The savings and benefits of reducing the 24,000+ deaths annually, in the United States alone, attributable to pollution from coal-fired electricity plants. (Not to mention the 500,000+ asthma and 38,000+ heart attacks).
  •    

  • The improved average IQ (in the US and globally) through reducing mercury (from coal emissions) inthe food chain.

  •    
  • Improved water supplies due to reduce fossil-fuel processing and power plant demands, and reduced pollution of supply sources.
  •    

  • Improved National Park views due to reduced fossil-fuel pollution.
  •    

  • Improved business productivity ("greening" work spaces leads to 10-25% productivity improvement) and educational performance

And, the list can go on. And on, And on ...

Greenpeace should be applauded for the quality of result from their project. This is a meaningful study. A study that shows that we can achieve a prosperous and climate-friendly society, meeting scientific targets for greenhouse-gas emission reductions, and do so at a "profit".   While recognizing this, we should also be clear: this report greatly underestimates the true value of pursuing an energy efficiency and clean energy future.

And, they recognize this issue. When questioned, when I asked "should I title my post "Greenpeace grossly underestimates value", they stated that "The number one criticism that we receive is that we are underestimating the benefits and underestimating the opportunities."

Mentioning items like conservative estimates of wind-power potential (the US could continue at 2008 levels of installations and basically meet the plan's wind targets), Greenpeace's Sven Teske stated that

"It would do our credibility no good if we were more aggressive in our estimates."

Well, the question to consider: if not Greenpeace, then who?  

Why not lay out all the costs, all the benefits, with a serious discussion of where aggressive assumptions about renewables might actually lead the discussion?

To be fair, many of these costs are not "missing" from the reportt, as pages 4-5 has a section "global warming: the challenge of our times".  This includes information on the risk of mass extinctions, sea level rise, etc. It mentions that Sir Nicholas Stern has estimated that Global Warming could reduce global GDP by 20 percent and includes this paragraph:

The economic cost of global warming to the U.S. economy from just four impacts (hurricane damage, water shortage, energy costs, and real estate losses) are projected to reach $271 billion by 2025.

Thus, the Greenpeace team is far from ignorant about "external" costs. In their cost/benefit calculation, however, none of those costs (avoided costs as benefit) are included.

Even so ...

Even with such a conservative approach, Greenpeace lays out a 'profitable' path forward.  The clean energy option would, from 2005-2030, require $2.8 trillion in investments, $1.1 trillion more than 'business as usual' would drive.  Thus, the cost to buy seems extraordinarily higher, but that is a misguided view, ignoring the cost to own as the total fuel cost for fossil fuels (in a very low ballpark estimate of fossil fuel prices) would be $10.85 trillion as opposed to $8.7 trillion for the Energy [R]evolution scenario, or over $2 trillion less just by 2030. Thus, the "total" impact of cost to buy would be about $1 trillion less, even without considering all the other, external, costs and benefits. And, by the way, that is just through 2030 ... the benefits mount from there, as the fossil fuel costs drop with each passing year.

Thus, even in an extremely understated case, the Energy [R]evolution seems sensible.  Perhaps if it had been done in a more robustly honest way, counting "externalities" internal to the discussion, it wouldn't have just looked sensible but as the slam-dunk imperative that it is.

A recommendation ...

A recommendation provided to Greenpeace: prepare a short, footnote heavy, experts contact information, paper discussing the types of externalities not included in the cost-benefit analyses of The Energy [R]evolution.  When presented Energy [R]evolution, make sure to emphasize that it is "conservative" in all the things, all the costs (and many benefits) that are excluded from a (high-quality) stove-piped, sector analysis.  And, be prepared to give all reporters (and decision-makers' staffs) the supplemental product that gives substance to the added values that are not included in the report.

NOTE:  For a discussion of yesteday's press conference, see  Energy [R]evolution. To be clear, there is much of value in this report, even if I (and Joe Romm ...) don't agree with all of it. And, in perhaps a newsworthy moment, Senator Sanders stated that the 80% by 2050 target for CO2 emissions reductions is not enough and that he might be introducing more aggressive legislation that will be adequate to meet scientific recommendations.

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Greenpeace research teams do top-notch work and this is a high-quality study/scenario.

But, if leading environmenatl organizations are not highlighting (in sessions with 20+ reporters) externalities, how can we complain if those externalities are not part of the general cost-benefit discussion about acting to mitigating catastrophic climate change?

Blogging regularly at Get Energy Smart. NOW!!!

by a siegel (siegeadATgmailIGNORETHISdotPLEASEcom) on Thu Mar 12th, 2009 at 06:16:58 PM EST
to confirm but this would put Greenpeace into the astroturf category just like most large organizations these days.
http://www.seashepherd.org/news-and-media/editorial-061220-1.html
by Lasthorseman on Thu Mar 12th, 2009 at 08:29:24 PM EST
Actually, I don't think that this is a fair description ... that they are astroturfing.

I think that they made a decision, an understandable decision, to be "conservative" in terms of what they counted / analyzed. On the other hand, as I ask, should "environmental organizations", of all institutions, leave "externalities" out of their calculations?

Blogging regularly at Get Energy Smart. NOW!!!

by a siegel (siegeadATgmailIGNORETHISdotPLEASEcom) on Thu Mar 12th, 2009 at 09:37:32 PM EST
[ Parent ]
I think you are being a bit unfair here. Most of the stuff in your list is difficult or impossible to quantify. It's not enough to say that there probably is some damage due to mercury pollution, you have to give an estimate how serious the problem is. Has that been done?

And even if you can quantify the damage, such as the changing pH level in the sea, can you give any useful estimate for the economic loss? And even if you can, for instance, estimate the damage to the oyster fisheries, the argument is flawed because you ignore the damage that is not economical. A lot of marine species may become extinct, but if we don't eat them they don't count in an economic assessment. That is a limitation (flaw?) of economics, but it seems this report plays by the rules of economics.

OTOH, as you point out, even this limited study shows the economic benefits of moving away from carbon. That really ought to be enough. If it makes economic sense go for it! If it helps the environment too, so much the better.

Real capricorns don't believe in astrology.

by tomhuld (thomas punkt huld at jrc punkt it) on Fri Mar 13th, 2009 at 07:30:29 AM EST
I absolute agree that this is not 'simple' to quantify but, again, if the environmental organizations are not even make a stab at it in laying out the case, how can anyone complain if others (whether government, 'academic' studies, industry mouthpieces) don't account for it either.

Read that paragraph re recommendation:  do the "conservative" case and then have something that puts meat into the explaining why this is highly conservative.

And, finally, it is unclear that this 'stove-piped' scenario makes the case: there are many uncertainties, choices as to "NPV", etc ... not hard to 'spin' this study in a way that makes this a not viable case for "CFO"/"MBA"-type thinking.

Blogging regularly at Get Energy Smart. NOW!!!

by a siegel (siegeadATgmailIGNORETHISdotPLEASEcom) on Fri Mar 13th, 2009 at 09:38:48 AM EST
[ Parent ]


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