Tag: Policy

DICE

This is a replication of William Nordhaus’ original DICE model, as described in Managing the Global Commons and a 1992 Science article and Cowles Foundation working paper that preceded it.

There are many good things about this model, but also some bad. If you are thinking of using it as a platform for expansion, read my dissertation first.

Units balance.

I provide several versions:

  1. Model with simple heuristics replacing the time-vector decisions in the original; runs in Vensim PLE
  2. Full model, with decisions implemented as vectors of points over time; requires Vensim Pro or DSS
  3. Same as #2, but with VECTOR LOOKUP replaced with VECTOR ELM MAP; supports earlier versions of Pro or DSS
    • DICE-vec-6-elm.mdl (you’ll also want a copy of DICE-vec-6.vpm above, so that you can extract the supporting optimization control files)

Note that there may be minor variances from the published versions, e.g. that transversality coefficients for the state variables (i.e. terminal values of the states for optimization) are not included. The optimizations use fewer time decision points than the original GAMS equivalents. These do not have any significant effect on the outcome.

States' role in climate policy

Jack Dirmann passed along an interesting paper arguing for a bigger role for states in setting federal climate policy.

This article explains why states and localities need to be full partners in a national climate change effort based on federal legislation or the existing Clean Air Act. A large share of reductions with the lowest cost and the greatest co-benefits (e.g., job creation, technology development, reduction of other pollutants) are in areas that a federal cap-and-trade program or other purely federal measures will not easily reach. These are also areas where the states have traditionally exercised their powers – including land use, building construction, transportation, and recycling. The economic recovery and expansion will require direct state and local management of climate and energy actions to reach full potential and efficiency.

This article also describes in detail a proposed state climate action planning process that would help make the states full partners. This state planning process – based on a proven template from actions taken by many states – provides an opportunity to achieve cheaper, faster, and greater emissions reductions than federal legislation or regulation alone would achieve. It would also realize macroeconomic benefits and non-economic co-benefits, and would mean that the national program is more economically and environmentally sustainable.

Continue reading “States' role in climate policy”

The Dynamics of Science

First, check out SEED’s recent article, which asks, When it comes to scientific publishing and fame, the rich get richer and the poor get poorer. How can we break this feedback loop?

For to all those who have, more will be given, and they will have an abundance; but from those who have nothing, even what they have will be taken away.
—Matthew 25:29

Author John Wilbanks proposes to use richer metrics to evaluate scientists, going beyond publications to consider data, code, etc. That’s a good idea per se, but it’s a static solution to a dynamic problem. It seems to me that it spreads around the effects of the positive feedback from publications->resources->publications a little more broadly, but doesn’t necessarily change the gain of the loop. A better solution, if meritocracy is the goal, might be greater use of blind evaluation and changes to allocation mechanisms themselves.

Lamarckat35

The reason we care about this is that we’d like science to progress as quickly as possible. That involves crafting a reward system with some positive feedback, but not so much that it easily locks in to suboptimal paths. That’s partly a matter of the individual researcher, but there’s a larger question: how to ensure that good theories out-compete bad ones?

170px-Darwin_ape

Now check out the work of John Sterman and Jason Wittenberg on Kuhnian scientific revolutions.

Update: also check out filter bubbles.

C-ROADS Roundup

I’m too busy to write much, but here are some quick updates.

C-ROADS is in the news, via Jeff Tolleffson at Nature News.

Our State of the Global Deal conclusion,  that current proposals are not on track, now has more reinforcement:

Check out Drew Jones on TEDx.

Talking to the taxman about math

I ran across this gem in the text of Waxman Markey (HR 2454):

(e) Trade-vulnerable Industries-

(1) IN GENERAL- The Administrator shall allocate emission allowances to energy-intensive, trade-exposed entities, to be distributed in accordance with section 765, in the following amounts:

(A) For vintage years 2012 and 2013, up to 2.0 percent of the emission allowances established for each year under section 721(a).

(B) For vintage year 2014, up to 15 percent of the emission allowances established for that year under section 721(a).

(C) For vintage year 2015, up to the product of–

(i) the amount specified in paragraph (2); multiplied by

(ii) the quantity of emission allowances established for 2015 under section 721(a) divided by the quantity of emission allowances established for 2014 under section 721(a).

(D) For vintage year 2016, up to the product of–

(i) the amount specified in paragraph (3); multiplied by

(ii) the quantity of emission allowances established for 2015 under section 721(a) divided by the quantity of emission allowances established for 2014 under section 721(a).

(E) For vintage years 2017 through 2025, up to the product of–

(i) the amount specified in paragraph (4); multiplied by

(ii) the quantity of emission allowances established for that year under section 721(a) divided by the quantity of emission allowances established for 2016 under section 721(a).

(F) For vintage years 2026 through 2050, up to the product of the amount specified in paragraph (4)–

(i) multiplied by the quantity of emission allowances established for the applicable year during 2026 through 2050 under section 721(a) divided by the quantity of emission allowances established for 2016 under section 721(a); and

(ii) multiplied by a factor that shall equal 90 percent for 2026 and decline 10 percent for each year thereafter until reaching zero, except that, if the President modifies a percentage for a year under subparagraph (A) of section 767(c)(3), the highest percentage the President applies for any sector under that subparagraph for that year (not exceeding 100 percent) shall be used for that year instead of the factor otherwise specified in this clause.

What we have here is really a little dynamic model, which can be written down in 4 or 5 lines. The intent is apparently to stabilize the absolute magnitude of the allocation to trade-vulnerable industries. In order to do that, the allocation share has to rise over time, as the total allowances issued falls. After 2026, there’s a 10%-per-year phaseout, but that’s offset by the continued upward pressure on share from the decline in allowances, so the net phaseout rate is about 5%/year, I think. Oops: Actually, I think now that it’s the other way around … from 2017-2025, the formula decreases the share of allowances allocated at the same rate as the absolute allowance allocation declines. Thereafter, it’s that rate plus 10%. There is no obvious rationale for this strange method.

Seems to me that if legislators want to create formulas this complicated, they ought to simply write out the equations (with units) in the text of the bill. Otherwise, natural language hopelessly obscures the structure and no ordinary human can participate effectively in the process. But perhaps that’s part of the attraction?

ABC to air Clout & Climate Change documentary

This just in from CNAS:

ABC News will air Earth 2100, the prime time documentary for which they filmed the war game, on June 2, 2009, at 9:00 p.m. (EST). You can view a promotional short report on the documentary from ABC News online, and hopefully you will all be able to view it on television or via Internet.

In conjunction with the airing of the documentary, CNAS has made the participant briefing book and materials from the game available online. We encourage other institutions to use and cite these materials to learn about the game and to stage their own scenario exercises. I also hope that they will be useful to you for your own future reference.

Finally, we are posting a short working paper of major findings from the game. While the game did not result in the kind of breakthrough agreements we all would have liked to see, this exercise achieved CNAS’s goals of exploring and highlighting the potential difficulties and opportunities of international cooperation on climate change. I know that everyone took away different observations from the game, however, and I hope that you will share your memories and your own key findings of the event with us, and allow us to post them online as a new section of the report.

Visit the Climate Change War Game webpage to view the CNAS report on major findings and background on developing the 2015 world, the participant briefing book, and materials generated from the game.

Battle of the Bulb

The NYT covers the resistance movement against incandescent light bulb bans. I think most of the resistance’s arguments are flimsy. Good-quality CFLs have better color reproduction and much longer lifetimes than incandescents. Start up times are now pretty fast, flicker is not a problem, and cold weather operation is fine outdoors, even here in Montana. Bad-quality bulbs are more problematic, but you get what you pay for; if you pay for quality, you still come out ahead with CFLs.

Still, I sympathize with the resistance, because an outright ban makes little sense. CFLs don’t work in some applications, and don’t even save energy or money when used in locations that are infrequently on. They also make lousy chicken incubators. Instead, we should ban inefficient lighting economically, by pricing GHGs, local air quality, light pollution, energy security, and whatever else motivates us to seek efficient lighting in the first place. Then incandescents can stick around for things that make sense, and disappear for things that don’t. The resistance won’t have to hoard bulbs, because they can run their little tungsten filaments as long as they feel like paying for the privelege. While we’re at it, we should price mercury, so the indoor and outdoor pollution effects of CFL disposal and coal combustion are properly traded off.

Command and control is so 20th century.

Bonn – Are Developing Countries Asking For the Wrong Thing?

Yesterday’s news:

BONN, Germany (Reuters) – China, India and other developing nations joined forces on Wednesday to urge rich countries to make far deeper cuts in greenhouse gas emissions than planned by 2020 to slow global warming.

I’m sure that the mental model behind this runs something like, “the developed world created most of the problem up to this point, and they’re rich, so they should get busy making deep cuts, while we grow a little more to catch up.” Regardless of fairness considerations, that approach ignores the physics of the situation. If developing countries continue to increase emissions, it hardly matters how deep cuts are in the rich world. Either everyone plays along, or mitigation doesn’t work.

I fired up C-ROADS and ran a few scenarios to illustrate:

C-ROADS reduction scenarios

The top blue line is the AIFI business-as-usual, with rapid emissions growth. If rich nations stabilize emissions as of today, you get the red line – still much more than 2x CO2 at the end of the century. Whether the rich start cutting emissions a little (1%/yr, green) or a lot (5%/yr, green) after that makes relatively little difference, because emissions from the rich world quickly become a small share of the total. Getting everyone to merely stabilize emissions (at 2009 levels for the rich, 2020 for developing countries, black) makes a substantially bigger difference than deep cuts by the rich alone. Stabilizing CO2 in the atmosphere at a low level requires deep cuts by everyone (here 4%/year, brown).

If we’re serious about stabilization, it doesn’t make sense for the rich to decarbonize faster, so that the developing world can construct more carbon-dependent capital that will ultimately have to be deconstructed. It may sound “fair” in carbon-per-capita terms, but I don’t think that’s a very good measure of human welfare, and it’s unlikely to end up with a fair distribution of damages.

If the developing countries are really concerned about climate impacts (as they should be), they should be looking to the rich world for help getting onto a low-carbon path today, not in 20 years. They should also be willing to impose a carbon price on themselves. It won’t collapse their economies any more than it will ours. Without a price on carbon, rebound effects and leakage will eat up most gains, as the private sector responds to the real signal: “go green (but the price of carbon is zero, wink wink nudge nudge).” Their request to the rich should be about the transfers, property rights, and other changes it takes to get the job done with some measure of distributional fairness (a topic that won’t be popular in some circles).

Reactions to Waxman Markey

My take: It’s a noble effort, but flawed. The best thing about it is the broad, upstream coverage of >85% of emissions. However, there are too many extraneous pieces operating alongside the cap. Those create possible inefficiencies, where the price of carbon is nonuniform across the economy, and create a huge design task and administrative burden for EPA. It would be better to get a carbon price in place, then fiddle with RPS, LCFS, and other standards and programs as needed later. The deep cuts in emissions reflect what it takes to change the climate trajectory, but I’m concerned that the trajectory is too rigid to cope with uncertainty, even with the compliance period, banking, borrowing, and strategic reserve provisions. So-called environmental certainty isn’t helpful if it causes price volatility that leads to the undoing of the program. As always, I’d rather see a carbon tax, but I think we could work with this framework if we have to. Allowance allocation is, of course, the big wrestling match to come.

The WSJ has a quick look

Joe Romm gives it a B+

GreenPeace says it’s a good first step

USCAP likes it (they should, a lot of it is their ideas):

USCAP hails the discussion draft released by Chairmen Waxman and Markey as a strong starting point for enacting legislation to reduce greenhouse gas emissions. The discussion draft provides a solid foundation to create a climate strategy that both protects our economy and achieves the nation’s environmental goals. It recognizes that many of these issues are tightly linked and must be dealt with simultaneously. We appreciate the thoughtful approach reflected in the draft and the priority the Chairmen are placing on this important issue.

The draft addresses most of the core issues identified by USCAP in our Blueprint for Legislative Action and reflects many of our policy recommendations. Any climate program must promote private sector investment in vital low-carbon technologies that will create new jobs and provide a foundation for economic recovery. Legislation must also protect consumers, vulnerable communities and businesses while ensuring economic sustainability and environmental effectiveness.

The API hasn’t reacted, but the IPAA has coverage on its blog

CEI hates it.

Rush Limbaugh says it’ll finish us off,

RUSH: Henry Waxman’s just about finished his global warming energy bill, 648 pages, as the Democrats prepare to finish off what’s left of the United States. Folks, we have got to drive these people out of office. We have to start now. The Republicans in Congress need to start throwing every possible tactic in front of everything the Democrats are trying to do. This is getting absurd. Listen to this. Henry Waxman and Edward Markey are putting the finishing touches on a 648-page global warming and energy bill that will certainly finish this country off. They’re circulating the bill today. The text of the bill ought to be up soon at a website called globalwarming.org. The bill contains everything you’d expect from an Algore wish list. Reading this, I don’t know how this will not raise energy prices to crippling levels and finish off the auto industry as we know it. (More here)

Al Gore Armageddon

Time points out that the Senate could be a dealbreaker:

The effects of the already-intense lobbying around the issue were being felt across the Capitol, where the Senate the same afternoon passed by an overwhelming margin an amendment resolving that any energy legislation should not increase electricity or gas prices.

That’ll make it tough to get 60 votes.