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Diary of a Tree Stump

Something lighter:                                    

  “I would vote for a tree stump if it could beat Donald Trump”

   [Timothy Egan, in his Nov. 8, 201...

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VITAMIN C FOR OUR FEEBLE RECOVERY


Thursday April 10, 2014

[THIS ESSAY ORIGINALLY APPEARED IN QUARTZ]

As our feeble recovery shambles on, the question arises as to whether the United States economy is being dragged down by forces, some decades in the making, beyond the power of central banks and policymakers to reverse. Workers, for instance, have found their bargaining power eroded by the twin threats of offshoring and automation with the result that real median household income is lower than it was in 1989, and the median American worker earns no more in 2013 than he or she did in 1979.  Most Americans simply do not have the spending power to drive a robust recovery.  An even longer-term, and more provocative, perspective comes from Northwestern University economist Robert Gordon. He argues that it is not so much that the recovery is weak, but that prior growth was an anomaly, a one-time hundred-year surge fueled by the Industrial Revolution, and which began to fade in the 1960s and will not be repeated.

Even if Gordon is right, there is still hope. There may yet be more tricks left in the Industrial Revolution. Take energy for instance. In the early 20th century, fossil fuels came to so utterly dominate the energy mix that innovation in alternative forms of energy, flourishing in the early years of the last century, went into a coma for 80 years from which it only began to emerge in recent decades. Energy innovation has the heft and breadth (the United States spends about $1.2 trillion on energy each year, 82% of which goes to fossil fuels) to power a whole new phase of economic growth. To see this opportunity, however, requires a shift in focus from the perspective Gordon offers.

Gordon presented his argument in an influential 2012 paper he wrote for the National Bureau of Economic Research (the institution that has the last word on when recessions start and end) titled, “Is US Economic Growth Over?” The paper produced a storm of comment, much critical, among economists in the blogosphere. It's easy to see why. Gordon notes that for most of the Christian Era there was little or no growth in the West. Then, from about 1870 to about 1970 came transformative innovations—running water, sanitation, the internal combustion engine—which drastically reduced infant mortality and the burden of disease, and accelerated transportation and communications by orders of magnitude. By the time the third phase of the Industrial Revolution, the Digital Age began around 1960, notes Gordon, the era had exhausted its capacity for transformative innovations.

Keeping in mind that there is no more precise definition of innovation than there is of other cherished human attributes such as intelligence or language, Gordon makes a spirited case. To illustrate his point, he offers a simple thought experiment. Ask anyone which they would give up if they had to choose: running water and toilets or their laptops and mobile phones? Standard of living increases from these later innovations are incremental, argues Gordon, not the doublings of the earlier breakthroughs. Indeed economic growth and productivity have slowed in the United States since the 1960s.

So let’s go back to get a better fix on a more positive future. Instead of thinking of the technologies of industrialization, consider the dominant energy source that drove them: fossil fuels.  As much as anything, commercialization of fossil fuels provided the great engine of growth in the early 20th century, so much so that it’s easy to imagine that in the future we might be referring to the Fossil Fuels Era as distinct from the Industrial Revolution.

The distinction is important because until fossil fuels came to dominate in the early and middle decades of 20th  century, scientists and engineers were exploring an enormous variety of sources of energy, some of which are still considered cutting edge today. Thomas Edison first proposed harnessing the Gulf Stream to run impellers and produce electricity in 1901. Today, up and running wave, tidal and river currant projects produce electricity from the North Sea to the Pacific. In Jay Leno’s car collection is an electric car built in 1907. The Stirling Engine, a simple heat pump invented in the 19th century provides the basic design for utility-scale electrical generating projects in the Southwest. But for the discovery of cheap fossil fuels, we might be vastly further along in the development of these alternatives.

Oil no longer cheap or easy to extract, and with the realization that fossil fuels carry heavy environmental costs, these alternatives have re-emerged from their 80-year hibernation. There is nothing more central to civilization than the energy that powers it. The migration to alternatives will ultimately mobilize trillions of dollars in capital spending as the move to alternative energy gathers momentum.

This transition will not be smooth. Wind, solar, and geothermal power have been on a roller coaster of boom, bust, boom since the late 1970s, but they are getting close to a tipping point.  Once these non-nuclear and non-hydro alternatives reach somewhere around 5% of global energy production the pace of adoption should take off, providing the economy, and America's beleaguered workers, with one more, long-delayed, shot of Vitamin C. Apart from anything else, the spread of these technologies would prove decisively that the great surge in standards of living in the West was truly based on innovation, and not merely the lucky discovery of cheap fossil fuels.

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Short Take

THOUGHTS ON WHY THE EARLY IPCC ASSESSMENTS UNDERSTATED THE CLIMATE THREAT

 

An oped involves extreme compression, and so I thought I’d expand on why I think the initial IPCC reports so underestimated the threat. Make no mistake, the consensus in the summaries for policy makers in the first two assessments did underestimate the threat. The consensus was that permafrost would be stable for the next 100 years and also that the ice sheets would remain stable (there was even a strong sentiment at that time that the East Antarctic sheet would gain mass). Moreover, in 1990, the concept of rapid climate change was at the periphery of mainstream scientific opinion. All these things turned out to be wrong

Of course, there were scientists at that time who raised alarms about the possibility of rapid climate change, collapse of the ice sheets, and nightmare scenarios of melting permafrost, but, fairly or not, the IPCC summary for policy makers was and is taken to represent the consensus of scientific thinking.

In my opinion such documents will always take a more conservative (less dramatic) position than what scientists feel is justified. For one thing the IPCC included policy makers, most of whom were more incentivized to downplay the threats. For another, many of the national governments that were the customers for these assessments barely tolerated the exercise and gave strong signals that they didn’t want to see anything that called for dramatic action, and this being the UN, there was a strong push to present a document that as many governments as possible would accept.

And then there is the nature of science and the state of climate science at that point. There is an inherent structural lag built in to the nature of science. For instance, the 1980’s were marked by the rapid development of proxies to see past climate changes with ever more precision. By the mid-late 80’s the proxies and siting had been refined sufficiently that the GISP and GRIP projects could confidently get ice cores from Greenland that they felt represented a true climate record and by then they also had the proxies with the resolution to see the rapid changes that had taken place in the past. Given the nature of data collection, interpretation, peer-review and publishing, it wasn’t until 1993 that these results were published.

It took nearly another decade for this new, alarming, paradigm about how rapidly global climate can change to percolate through the scientific community, and, even today, much of the public is unaware that climate can change on a dime.

As for the ice sheets, when I was on the West Antarctic Ice Sheet in 1996, there was talk about the acceleratio of  ice streams feeding the Thwaites and Pine Island glaciers, but the notion that there might be a significant increase in runoff from the ice sheet over the next hundred years was still very much a fringe idea.

With permafrost, the problem was a sparsity of data in the 80s and early 90s and it is understandable that scientists didn’t want to venture beyond the data.

The problem for society as a whole was that the muted consensus on the scale of the threat diminished any sense of urgency about dealing with the problem. Perhaps the best example of this was the early work of William Nordhaus. Working from the IPCC best estimates in the early 1990s Nordhaus published one paper in which he predicted the hit to the US GDP from climate change in 2100 would be about ½ of 1%. Nobody is going to jump out of their chair and demand action if the hit to the economy was going to be 0.5% of GPD a hundred years laterLibertarians such as William Niskanen seized on this and testified before Congress that there was plenty of time to deal with global warming if it was a threat at all.  

And then there was the disinformation campaign of industry, particularly fossil fuel lobbyists, as well as pressure from unions (the UAW in particular) and the financial community. These highly motivated, deep-pocketed interests seized on scientific caution to suggest deep divisions among scientists and that the threat was overplayed. Little wonder then that the public failed to appreciate that this was a looming crisis that demanded immediate, concerted action.

 



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