Climate change is one symptom of the real underlying problem of overshoot. Simon Michaux’s work shows that we have insufficient minerals on earth to achieve the energy transition if we remain a 19 terawatt civilisation. Any growth-oriented vision is at variance with the reality of a finite planet. It is our entire economic paradigm that must be changed, not just the flows of capital within it.
Only $4T? What a relief! Your comparison to America's nutjob-level defense spending was very welcome. If just 5% of the world can afford over $1T/year, then the richest 20% of the world just has to emulate that commitment level, and we've got our $4T without bothering the poorest 80%.
More seriously, most people think America is overspending by at least double on defense, with the bill coming in at about $7000/household/year, based on 130M households. That this is cast by defense defenders as "cheap, historically" only shows how *massive* expenses can be dismissed with a shrug by just comparing to the larger economy. (The Atlantic figured "Free College" in 2014, at $40B/year. Even expanding to $50B/year now, that's well under the defense *increase* of $70B in the last Trump budget. Free College would be an obviously minor expense for America, by the defense reasoning. The $70B went through Congress without much debate; Free College therefore deserves even less.)
But other nations have money, too, and if $4T were distributed against the billion homes in the top 40% of the world income distribution, just $4000/year. But the "developing world" isn't all that poor any more, either, and they can probably knock us rich folks down to just $3K/household/year. (I'm not imagining anybody cutting cheques, of course: this shows up in higher bills for utilities, steel, concrete, food(!!), and everything else.)
Note, however, that your 40% of the world income distribution needs to bring in middle income countries. PPP should be taken into account, but they are still poor by wealthy nation standards. Middle Income countries range from those defined as lower middle-income economies - those with a GNI per capita between $1,036 and $4,045; and upper middle-income economies - those with a GNI per capita between $4,046 and $12,535 (2021). Middle income countries are home to 75% of the world's population and 62% of the world's poor.
I don't doubt, however, that the $4T number could be substantially, if not totally, raised by wealthy countries if the threat were perceived to be dire and immediate, and gifted politicians could convince these populations that it is in their self-interest to do so.
I wonder if these estimates have factored in the order of magnitude increase necessary in the mining and extraction of copper, cobalt, lithium, and REE. Estimates are that 10X copper production will be needed just to build out worldwide EV fleets. The world's huge high-grade copper deposits have been found and are fully exploited. What remains to be found are all lower grade and smaller tonnage. As with lithium, increased demand has caused spiking commodity prices. Copper and the other metals will follow this pattern, especially as current exploration is not even sufficient to replace continuing depletion of existing deposits
We, the USA, cannot participate in anything like this. We have wars to pay for--wars we have fought, wars we are fighting, and war we are going to fight. Maybe other countries can take up the slack.
I love this analysis. This is a doable number. At $4t, it's not 10-20% of global GDP. I do have a question that I think may be helpul. Prof. Tooze quotes global GDP as roughly $85T. The IMF's own estimate for 2022 is $101.5T. This would make the $4T 4% now which is much more manageable than the 6 percent figure. Any ideas on what might be going on with this data? Here's the actual IMF data: It's on row 4 of the IMF spreadsheet, and the 2022 figure is in column AY. Any ideas on what might be going on here? Your help would be appreciated.
IMF estimates that global subsidies to Fossil Fuels are US$7.1 trillion per annum. Up from 5.6 trillion the previous time they estimate it a few years prior. This includes both pre- and post- tax subsidies, so direct cash and tax rebates but also public health impacts from air quality deterioration, heating planet etc etc.
AT's good sense and clear vision here is good company for Keynes' own, which is high praise indeed! His comments about our "hypocritical systems" brought to mind Keynes’ analysis of the political struggles in the 1920's. To whet your appetite :
"If, indeed, public opinion were an unalterable thing, it would be a waste of time to discuss public affairs. And though it may be the chief business of newsmen and politicians to ascertain its momentary features, a writer ought to be concerned, rather, with what public opinion should be. I record these platitudes because many Americans give their advice, as though it were actually immoral to make suggestions which public opinion does not now approve. In America, I gather, an act of this kind is considered so reckless that some improper motive is at once suspected, and criticism takes the form of an inquiry into the culprit's personal character and antecedents."
But much more profound is Keynes' essay “The Change of Opinion”
The aspect missing from this analysis is that in order to develop sustainably, we need to degrow our economies in rich countries because we are over-consuming what the planet is capable of sustainably providing for us each year. We are killing the golden goose rather than selling it. Once it's gone, in many cases it's gone for good.
innovation is welcome, but we cannot ever innovate around the laws of thermodynamics or other laws of physics and chemistry and the inherent limitations of biology and ecological systems.
Key obstacle is austerity mindset in Europe and lack of private investment in general at current carbon prices. McKinsey report in fact states that “ From now to 2030, 60 percent of the investment would not have a business case.”. So, we are indeed headed for disaster unless we get massive public climate investments - like in China
As I read through Mr. Tooze's breathtakingly boring and predictable "academic" exercise, I was continually reminded of two inevitable results of self styled "elites" and "experts" when they produce fishwrap like this "study": First, that the lives of the members of the group that produced it will not change one iota if, God forbid, it ever is implemented. The lives of the hoi polloi, who are viewed down long noses by these people, however, will be...and in mostly negative ways. Second, that if it is indeed implemented, and inevitably fails miserably, that there will be no consequences for those who wrote it, developed it, and somehow got it put into action.
Four trillion, forty trillion, four hundred trillion dollars will do nothing to impact our climate. The UN is a cesspool of anti-Semitism, hatred of the US, and wastes nearly every dollar it spends. Ask the people of Uganda. Ask the children who are regularly sexually exploited and assaulted by UN 'peacekeepers'. Ask the citizens of Israel, the target of the Jew-hatred that goes right to the top of the UN's so called leadership. Thanks, but no thanks.
Actually, there are two questions about that $4T. One, as you say, is that we may in many cases be switching to a *cheaper* solution for the problem ( be the problem megawatts or fertilizer), and the investment merely gets us over a capital-hump to cheaper-operating victory.
This cheapness has been underestimated over and over again, as David Roberts at volts.wtf has chronicled in his posts and podcasts. So the $4T may turn out an overestimate - or, at least, be a capital cost that is swiftly recovered on the operating. (If so, bankers are standing by, private industry!)
The other question, which Mr. Tooze mentioned, is whether the expense was coming anyway, and we should only charge any "Delta" to the "fix the climate" account - if rural India was going to get cheap coal power for $1T, and instead gets clean power for $1.5T, then only $0.5T should be charged against that $4T/year. The article didn't clear up for me, which way the COP estimate handled such "deltas".
Climate change is one symptom of the real underlying problem of overshoot. Simon Michaux’s work shows that we have insufficient minerals on earth to achieve the energy transition if we remain a 19 terawatt civilisation. Any growth-oriented vision is at variance with the reality of a finite planet. It is our entire economic paradigm that must be changed, not just the flows of capital within it.
Only $4T? What a relief! Your comparison to America's nutjob-level defense spending was very welcome. If just 5% of the world can afford over $1T/year, then the richest 20% of the world just has to emulate that commitment level, and we've got our $4T without bothering the poorest 80%.
More seriously, most people think America is overspending by at least double on defense, with the bill coming in at about $7000/household/year, based on 130M households. That this is cast by defense defenders as "cheap, historically" only shows how *massive* expenses can be dismissed with a shrug by just comparing to the larger economy. (The Atlantic figured "Free College" in 2014, at $40B/year. Even expanding to $50B/year now, that's well under the defense *increase* of $70B in the last Trump budget. Free College would be an obviously minor expense for America, by the defense reasoning. The $70B went through Congress without much debate; Free College therefore deserves even less.)
But other nations have money, too, and if $4T were distributed against the billion homes in the top 40% of the world income distribution, just $4000/year. But the "developing world" isn't all that poor any more, either, and they can probably knock us rich folks down to just $3K/household/year. (I'm not imagining anybody cutting cheques, of course: this shows up in higher bills for utilities, steel, concrete, food(!!), and everything else.)
I repeat: $4T? What a relief!
Note, however, that your 40% of the world income distribution needs to bring in middle income countries. PPP should be taken into account, but they are still poor by wealthy nation standards. Middle Income countries range from those defined as lower middle-income economies - those with a GNI per capita between $1,036 and $4,045; and upper middle-income economies - those with a GNI per capita between $4,046 and $12,535 (2021). Middle income countries are home to 75% of the world's population and 62% of the world's poor.
I don't doubt, however, that the $4T number could be substantially, if not totally, raised by wealthy countries if the threat were perceived to be dire and immediate, and gifted politicians could convince these populations that it is in their self-interest to do so.
I wonder if these estimates have factored in the order of magnitude increase necessary in the mining and extraction of copper, cobalt, lithium, and REE. Estimates are that 10X copper production will be needed just to build out worldwide EV fleets. The world's huge high-grade copper deposits have been found and are fully exploited. What remains to be found are all lower grade and smaller tonnage. As with lithium, increased demand has caused spiking commodity prices. Copper and the other metals will follow this pattern, especially as current exploration is not even sufficient to replace continuing depletion of existing deposits
We, the USA, cannot participate in anything like this. We have wars to pay for--wars we have fought, wars we are fighting, and war we are going to fight. Maybe other countries can take up the slack.
I love this analysis. This is a doable number. At $4t, it's not 10-20% of global GDP. I do have a question that I think may be helpul. Prof. Tooze quotes global GDP as roughly $85T. The IMF's own estimate for 2022 is $101.5T. This would make the $4T 4% now which is much more manageable than the 6 percent figure. Any ideas on what might be going on with this data? Here's the actual IMF data: It's on row 4 of the IMF spreadsheet, and the 2022 figure is in column AY. Any ideas on what might be going on here? Your help would be appreciated.
--John
https://www.imf.org/-/media/Files/Publications/WEO/WEO-Database/2022/WEOOct2022alla.ashx
IMF estimates that global subsidies to Fossil Fuels are US$7.1 trillion per annum. Up from 5.6 trillion the previous time they estimate it a few years prior. This includes both pre- and post- tax subsidies, so direct cash and tax rebates but also public health impacts from air quality deterioration, heating planet etc etc.
AT's good sense and clear vision here is good company for Keynes' own, which is high praise indeed! His comments about our "hypocritical systems" brought to mind Keynes’ analysis of the political struggles in the 1920's. To whet your appetite :
"If, indeed, public opinion were an unalterable thing, it would be a waste of time to discuss public affairs. And though it may be the chief business of newsmen and politicians to ascertain its momentary features, a writer ought to be concerned, rather, with what public opinion should be. I record these platitudes because many Americans give their advice, as though it were actually immoral to make suggestions which public opinion does not now approve. In America, I gather, an act of this kind is considered so reckless that some improper motive is at once suspected, and criticism takes the form of an inquiry into the culprit's personal character and antecedents."
But much more profound is Keynes' essay “The Change of Opinion”
https://www.economicsnetwork.ac.uk/archive/keynes_persuasion/The_Change_of_Opinion.htm
The aspect missing from this analysis is that in order to develop sustainably, we need to degrow our economies in rich countries because we are over-consuming what the planet is capable of sustainably providing for us each year. We are killing the golden goose rather than selling it. Once it's gone, in many cases it's gone for good.
innovation is welcome, but we cannot ever innovate around the laws of thermodynamics or other laws of physics and chemistry and the inherent limitations of biology and ecological systems.
Key obstacle is austerity mindset in Europe and lack of private investment in general at current carbon prices. McKinsey report in fact states that “ From now to 2030, 60 percent of the investment would not have a business case.”. So, we are indeed headed for disaster unless we get massive public climate investments - like in China
As I read through Mr. Tooze's breathtakingly boring and predictable "academic" exercise, I was continually reminded of two inevitable results of self styled "elites" and "experts" when they produce fishwrap like this "study": First, that the lives of the members of the group that produced it will not change one iota if, God forbid, it ever is implemented. The lives of the hoi polloi, who are viewed down long noses by these people, however, will be...and in mostly negative ways. Second, that if it is indeed implemented, and inevitably fails miserably, that there will be no consequences for those who wrote it, developed it, and somehow got it put into action.
Four trillion, forty trillion, four hundred trillion dollars will do nothing to impact our climate. The UN is a cesspool of anti-Semitism, hatred of the US, and wastes nearly every dollar it spends. Ask the people of Uganda. Ask the children who are regularly sexually exploited and assaulted by UN 'peacekeepers'. Ask the citizens of Israel, the target of the Jew-hatred that goes right to the top of the UN's so called leadership. Thanks, but no thanks.
Is there a link to the Bloomberg source for energy transition investments in 2022?
The tech you are talking about is evolving rapidly. Best to look at the analysis of those on the bleeding edge https://www.tesla.com/ns_videos/Tesla-Master-Plan-Part-3.pdf
Actually, there are two questions about that $4T. One, as you say, is that we may in many cases be switching to a *cheaper* solution for the problem ( be the problem megawatts or fertilizer), and the investment merely gets us over a capital-hump to cheaper-operating victory.
This cheapness has been underestimated over and over again, as David Roberts at volts.wtf has chronicled in his posts and podcasts. So the $4T may turn out an overestimate - or, at least, be a capital cost that is swiftly recovered on the operating. (If so, bankers are standing by, private industry!)
The other question, which Mr. Tooze mentioned, is whether the expense was coming anyway, and we should only charge any "Delta" to the "fix the climate" account - if rural India was going to get cheap coal power for $1T, and instead gets clean power for $1.5T, then only $0.5T should be charged against that $4T/year. The article didn't clear up for me, which way the COP estimate handled such "deltas".