Perhaps you should read Vaclav Smil's book 'Power Density' more closely. Power density is key in any energy transition and it is clear that there is an important role for nuclear energy in the future, the densest power source of them all. It seems to be willfully ignored in this article (and perhaps also in the McKinsey and EU commission reports). Banking on a very dense power source like nuclear energy is a superior strategy to banking on blue-sky innovations somewhere in the future ("That leaves 14 per cent to be covered by blue-sky innovation". Pie in the sky?). Just a single sentence has been dedicated to nuclear: "utopian assumptions about nuclear power". There's nothing utopian about it, it just simple physics (energy density) and a G7 country has proven over many decades now, that it works: France, which pretty much achieved the transition to an almost carbon-free electricity system approximately 20 years ago.
not taking a position on nuclear here just to say that nuclear has been a big topic of discussion in the EU Sustainable Taxonomy discussion, and following that you can see why the omission might not be one of oversight
If money were no object, the US and Russia are sitting on a million tonnes of depleted uranium in warehouses. Burned in fast reactors, this could power America at current levels for three millennia.
Nuclear power poses a geopolitical proliferation risk, as well as a controllable safety risk. These risks are manageable.
Yes, exactly, the problem is that nuclear energy has been pretty much neglected in Western countries since 20-30 years, with attention being (IMHO: wrongly) focused on energy sources with by far the lowest power density (wind and solar). Russia is now at the forefront of nuclear energy development and has two large fast reactors in operation, the BN-600 and the BN-800 and is building a third one (BREST-300). China is also catching up fast and has planned a massive build-out of nuclear power plants. Western countries are falling behind technologically, which is a bad thing, as I would rather like to see democratic countries at the forefront of such developments, instead of autocratic ones such as China and Russia. This also heightens geopolitical risk, which is enabled by the 'green' distractions in Western countries.
Unless you can find a way round Fukushima/Chernobyl effect, the lack of trust in rogue states making weapons from nuclear power program, everyone will go with the perceived safer option, regardless of efficiency arguments, and that's perfectly rational too.
Unfortunately, the Chinese government's nuclear rollout has been massively scaled back since Fukushima due to fears of public backlash. Acutely sensitive to public opinion, the CCP's nerve failed to hold. Investment has been redirected into a massive wind/solar buildout at 350GW/year boilerplate in Xinjiang, with huge power lines to deliver the gigawatts eastward.
I'm writing as a scientist. I'm not a climate scientist, so my specialized knowledge is limited, but I grew up around true experts, and have tried to stay informed.
Greenhouse gases are a real problem, and a solution is necessary. However the specific claims of expert panels are rhetorically excessive. Climate is exceedingly complex, and confident projections 50+ years into the future are fraught with uncertainty. To proceed with great caution in the face of possible severe danger is wise, but to promulgate educated guesses as "known facts" may ultimately simply discredit expertise. Thus, in my view, "If we do not [achieve net-zero carbon-dioxide emissions by 2050], we have reason to believe that the basic conditions of our existence will be in question" is perhaps true, provided one recognizes the weasel-word phrasing of "will be in question," but to me seems misleading.
Additionally, I echo the views of Camiel below: one wonders why e.g. nuclear energy is ignored in facing this problem. My own suspicion is that it reflects that sad tribal politicization of nearly everything now, such that cultural coherency becomes more important than solving problems, no matter how serious they may be.
Every time I see the biogenic carbon cycle mentioned in the same breath as fossil fuel emissions my sceptic sense starts tingling. The carbon cycle is a naturally occurring phenomena where by definition animal (and human btw) emissions are carbon neutral. Whether a cow eats a patch of grass or the grass is left to rot makes no difference in theory as it gets reabsorbed again. In practice, ruminants maintaining grassland health is a critical form of carbon storage. Not eating meat would not only not make a difference for fossil fuel based carbon emissions, it would actually be devastating for grasslands around the world. Grasslands which are better forms of carbon storage than forests as they are less likely to burn, and where plant agriculture cannot be performed due to infertile soils. The only place we can farm plants is in fertile soils that can support forests.
Improving productivity per cow, as we have done for decades, therefore acts as a form of carbon storage, since more carbon is stored per unit of meat and milk produced.
I find it truly mind boggling to see ruminant methane be mentioned as a cause of climate change. It shows how little knowledge of the subject many supposed experts have.
Not all cows eat grass or naturally occurring plant matter. We could also skip the cows completely and eat the plant matter ourselves. Cattle farming is pointlessly energy intensive, it's not just about farts.
In the framework of economic orthodoxy (neoliberalism) all discussions of social and/or economic transformation devolve to "how can we pay for it" and not infrequently "nice idea, but sadly we just can't afford it, there is no magic money tree, you see? Dismiss!"
Hence: "If the gap were to be closed by public expenditure, Europe's governments would, according to McKinsey, need to mobilise €4.9 trillion in subsidies over 30 years. That is the amount of profit taxpayers would need to offer investors to get them interested in the energy transition—€365 for every man, woman and child in the EU27, every year for 30 years. Painful and unfair, no doubt, but hardly inconceivable."
From a MMT perspective the first question to ask is "do we have the resources to do this"? If yes, the money can always be found - as it was for the various bouts of financial crisis-related QE and pandemic-related deficit spending (and Trump era tax cuts). The ideas that currency issuing governments depend on tax revenue for their spending and that government bond issuing equates to borrowing as in the private and household sectors, are just profoundly wrong and not evidence based.
Ok, we're past the 'govt as household' metaphor for finance, we know a govt's income is dependent on its spending, we know there isn't a checking account where our taxes are deposited for spending, we know a govt can uniquely lend itself money from its own bank, but size of debt still matters, there has to be a credible plan to pay it down.
Ok, so if we're past all that, then we are certainly NOT worried about paying the "debt" off! Look at Japan. You are still thinking that government debt is like ordinary debt. It is not.
Fair enough, Japan is an example why is it a good one? If 'debt' isn't thing, but we use 'finance deficit' if that is a thing (?), to transition to net zero what is the effect on the private sector, the micro-economics of the firm, is it still capitalism & accumulation, is money still a store of value? Has anyone operationalized or modeled getting to a net-zero economy through MMT? Can you show pensions won't evaporate via tax, inflation, or $ devalue? What effects does MMT have on short and long term bond mkt? The layperson, like me, can see the core argument, govt income depends on spending, if its not 'debt' or a deficit as commonly understood what is it? is there a floor? Is risk still a thing? What happens to currency mkts? Then there's the issue of 'raising taxes' to manage inflation, R's will just repeat 'raising taxes' forever, they'll probably make something out of MMT meaning a fantasy 'magic money tree', I'm not sure how layperson will understand govt money as a boundless public utility when they are mired in private debt, I don't know I'd like to read something about MMT in the real economy of work, wages, spending, saving etc beyond fiscal policy. MMT has to convince millions of people the US economy can do this without collapsing the economy, but there seems to be a tendency within MMT to wave away simple questions with assumptions and assertions. The worlds a lot messier then algebra. Sorry bit of a ramble.
So many good questions - so little time. Firstly MMT is not a policy, it’s an empirically based understanding of how government financing actually works. From there you can devise policy. The following will help you:
Deficit Financing, the Debt, and “Modern Monetary Theory”
Does the national debt matter? L. Randall Wray & Yeva Nersisyan DOI: 10.1080/2329194X.2020.1867586 (on Japan)
But for a brilliant introduction read Stephanie Kelton’s The Deficit Myth.
Japan, regarded as a basket case by orthodox economists for years, has as you know a massive government deficit - but friends were there recently just before COVID-19 and tell me it’s not at all like Zimbabwe!
Smil's power density metric is really no more than an interesting observation. It doesn't matter to energy users where and how electricity is generated, only that the supply is reliable and affordable. Besides, there are questions about the appropriate boundaries to apply: yes, the coal- or gas-fired power plant is relatively small, but what about the vast areas and quantities of materials that are required for its construction and operation, which in the case of coal may involve transoceanic supply chains, e.g. Australia to China and Japan? Also, distributed generation is clearly more resilient than a concentrated single point of failure. See "Competing principles driving energy futures: Fossil fuel decarbonization vs. manufacturing learning curves" http://dx.doi.org/10.1016/j.futures.2016.07.001
Trillions of euros worth of trade could be lost if more severe global warming depresses African economies. Africa's billions could buy trillions upon trillions of dollars worth of goods over the coming century, if they were sufficiently wealthy.
Well, the trillions will pay for themselves. One presumes that cost-effectiveness calculi have been done, and that this will probably be cheaper than spending trillions on additional infrastructure/urban hardening, bigger border walls to keep out more climate refugees, and more nuclear missiles/BMD/conventional forces/domestic security forces to deal with the additional wars and conflicts each additional degree of warming will engender.
What is the scholarship on these cost-benefit calculi?
Perhaps you should read Vaclav Smil's book 'Power Density' more closely. Power density is key in any energy transition and it is clear that there is an important role for nuclear energy in the future, the densest power source of them all. It seems to be willfully ignored in this article (and perhaps also in the McKinsey and EU commission reports). Banking on a very dense power source like nuclear energy is a superior strategy to banking on blue-sky innovations somewhere in the future ("That leaves 14 per cent to be covered by blue-sky innovation". Pie in the sky?). Just a single sentence has been dedicated to nuclear: "utopian assumptions about nuclear power". There's nothing utopian about it, it just simple physics (energy density) and a G7 country has proven over many decades now, that it works: France, which pretty much achieved the transition to an almost carbon-free electricity system approximately 20 years ago.
not taking a position on nuclear here just to say that nuclear has been a big topic of discussion in the EU Sustainable Taxonomy discussion, and following that you can see why the omission might not be one of oversight
If money were no object, the US and Russia are sitting on a million tonnes of depleted uranium in warehouses. Burned in fast reactors, this could power America at current levels for three millennia.
Nuclear power poses a geopolitical proliferation risk, as well as a controllable safety risk. These risks are manageable.
Yes, exactly, the problem is that nuclear energy has been pretty much neglected in Western countries since 20-30 years, with attention being (IMHO: wrongly) focused on energy sources with by far the lowest power density (wind and solar). Russia is now at the forefront of nuclear energy development and has two large fast reactors in operation, the BN-600 and the BN-800 and is building a third one (BREST-300). China is also catching up fast and has planned a massive build-out of nuclear power plants. Western countries are falling behind technologically, which is a bad thing, as I would rather like to see democratic countries at the forefront of such developments, instead of autocratic ones such as China and Russia. This also heightens geopolitical risk, which is enabled by the 'green' distractions in Western countries.
Unless you can find a way round Fukushima/Chernobyl effect, the lack of trust in rogue states making weapons from nuclear power program, everyone will go with the perceived safer option, regardless of efficiency arguments, and that's perfectly rational too.
Unfortunately, the Chinese government's nuclear rollout has been massively scaled back since Fukushima due to fears of public backlash. Acutely sensitive to public opinion, the CCP's nerve failed to hold. Investment has been redirected into a massive wind/solar buildout at 350GW/year boilerplate in Xinjiang, with huge power lines to deliver the gigawatts eastward.
I'm writing as a scientist. I'm not a climate scientist, so my specialized knowledge is limited, but I grew up around true experts, and have tried to stay informed.
Greenhouse gases are a real problem, and a solution is necessary. However the specific claims of expert panels are rhetorically excessive. Climate is exceedingly complex, and confident projections 50+ years into the future are fraught with uncertainty. To proceed with great caution in the face of possible severe danger is wise, but to promulgate educated guesses as "known facts" may ultimately simply discredit expertise. Thus, in my view, "If we do not [achieve net-zero carbon-dioxide emissions by 2050], we have reason to believe that the basic conditions of our existence will be in question" is perhaps true, provided one recognizes the weasel-word phrasing of "will be in question," but to me seems misleading.
Additionally, I echo the views of Camiel below: one wonders why e.g. nuclear energy is ignored in facing this problem. My own suspicion is that it reflects that sad tribal politicization of nearly everything now, such that cultural coherency becomes more important than solving problems, no matter how serious they may be.
Link to Mathes on Carbon Pricing is https://eu.boell.org/sites/default/files/2020-09/200922_hbs_EU_Pricing%20Carbon_Brussels_FINAL.pdf
Every time I see the biogenic carbon cycle mentioned in the same breath as fossil fuel emissions my sceptic sense starts tingling. The carbon cycle is a naturally occurring phenomena where by definition animal (and human btw) emissions are carbon neutral. Whether a cow eats a patch of grass or the grass is left to rot makes no difference in theory as it gets reabsorbed again. In practice, ruminants maintaining grassland health is a critical form of carbon storage. Not eating meat would not only not make a difference for fossil fuel based carbon emissions, it would actually be devastating for grasslands around the world. Grasslands which are better forms of carbon storage than forests as they are less likely to burn, and where plant agriculture cannot be performed due to infertile soils. The only place we can farm plants is in fertile soils that can support forests.
Improving productivity per cow, as we have done for decades, therefore acts as a form of carbon storage, since more carbon is stored per unit of meat and milk produced.
I find it truly mind boggling to see ruminant methane be mentioned as a cause of climate change. It shows how little knowledge of the subject many supposed experts have.
https://clear.ucdavis.edu/explainers/biogenic-carbon-cycle-and-cattle
On animals, and welfare. Make vast grassland 'Oostvaardersplassen' conservation areas, and just leave the cattle to get on with it.
https://www.ft.com/content/fdc7ae21-bd59-4887-8417-7905d57b67ba
And for another example, this guy produces 93k ton p.a. organic sugar without animal or synthetic fertilizer.
https://www.ellenmacarthurfoundation.org/case-studies/regenerative-agriculture-at-scale
Not all cows eat grass or naturally occurring plant matter. We could also skip the cows completely and eat the plant matter ourselves. Cattle farming is pointlessly energy intensive, it's not just about farts.
You can eat grass? You have very little knowledge of agriculture or the environment if you discard the role of ruminants like that.
In the framework of economic orthodoxy (neoliberalism) all discussions of social and/or economic transformation devolve to "how can we pay for it" and not infrequently "nice idea, but sadly we just can't afford it, there is no magic money tree, you see? Dismiss!"
Hence: "If the gap were to be closed by public expenditure, Europe's governments would, according to McKinsey, need to mobilise €4.9 trillion in subsidies over 30 years. That is the amount of profit taxpayers would need to offer investors to get them interested in the energy transition—€365 for every man, woman and child in the EU27, every year for 30 years. Painful and unfair, no doubt, but hardly inconceivable."
From a MMT perspective the first question to ask is "do we have the resources to do this"? If yes, the money can always be found - as it was for the various bouts of financial crisis-related QE and pandemic-related deficit spending (and Trump era tax cuts). The ideas that currency issuing governments depend on tax revenue for their spending and that government bond issuing equates to borrowing as in the private and household sectors, are just profoundly wrong and not evidence based.
Meanwhile, while the West struggles in its self-applied economic straitjacket, China is getting on with it: Peter Drahos, "Survival Governance" https://chinadialogue.net/en/climate/review-survival-governance/
Ok, we're past the 'govt as household' metaphor for finance, we know a govt's income is dependent on its spending, we know there isn't a checking account where our taxes are deposited for spending, we know a govt can uniquely lend itself money from its own bank, but size of debt still matters, there has to be a credible plan to pay it down.
Ok, so if we're past all that, then we are certainly NOT worried about paying the "debt" off! Look at Japan. You are still thinking that government debt is like ordinary debt. It is not.
Fair enough, Japan is an example why is it a good one? If 'debt' isn't thing, but we use 'finance deficit' if that is a thing (?), to transition to net zero what is the effect on the private sector, the micro-economics of the firm, is it still capitalism & accumulation, is money still a store of value? Has anyone operationalized or modeled getting to a net-zero economy through MMT? Can you show pensions won't evaporate via tax, inflation, or $ devalue? What effects does MMT have on short and long term bond mkt? The layperson, like me, can see the core argument, govt income depends on spending, if its not 'debt' or a deficit as commonly understood what is it? is there a floor? Is risk still a thing? What happens to currency mkts? Then there's the issue of 'raising taxes' to manage inflation, R's will just repeat 'raising taxes' forever, they'll probably make something out of MMT meaning a fantasy 'magic money tree', I'm not sure how layperson will understand govt money as a boundless public utility when they are mired in private debt, I don't know I'd like to read something about MMT in the real economy of work, wages, spending, saving etc beyond fiscal policy. MMT has to convince millions of people the US economy can do this without collapsing the economy, but there seems to be a tendency within MMT to wave away simple questions with assumptions and assertions. The worlds a lot messier then algebra. Sorry bit of a ramble.
So many good questions - so little time. Firstly MMT is not a policy, it’s an empirically based understanding of how government financing actually works. From there you can devise policy. The following will help you:
Deficit Financing, the Debt, and “Modern Monetary Theory”
Congressional Research Service https://crsreports.congress.gov R45976
Does the national debt matter? L. Randall Wray & Yeva Nersisyan DOI: 10.1080/2329194X.2020.1867586 (on Japan)
But for a brilliant introduction read Stephanie Kelton’s The Deficit Myth.
Japan, regarded as a basket case by orthodox economists for years, has as you know a massive government deficit - but friends were there recently just before COVID-19 and tell me it’s not at all like Zimbabwe!
Smil's power density metric is really no more than an interesting observation. It doesn't matter to energy users where and how electricity is generated, only that the supply is reliable and affordable. Besides, there are questions about the appropriate boundaries to apply: yes, the coal- or gas-fired power plant is relatively small, but what about the vast areas and quantities of materials that are required for its construction and operation, which in the case of coal may involve transoceanic supply chains, e.g. Australia to China and Japan? Also, distributed generation is clearly more resilient than a concentrated single point of failure. See "Competing principles driving energy futures: Fossil fuel decarbonization vs. manufacturing learning curves" http://dx.doi.org/10.1016/j.futures.2016.07.001
Trillions of euros worth of trade could be lost if more severe global warming depresses African economies. Africa's billions could buy trillions upon trillions of dollars worth of goods over the coming century, if they were sufficiently wealthy.
Well, the trillions will pay for themselves. One presumes that cost-effectiveness calculi have been done, and that this will probably be cheaper than spending trillions on additional infrastructure/urban hardening, bigger border walls to keep out more climate refugees, and more nuclear missiles/BMD/conventional forces/domestic security forces to deal with the additional wars and conflicts each additional degree of warming will engender.
What is the scholarship on these cost-benefit calculi?