Climate: The induced technology solution

By DAN WHIPPLE  |  Oct. 18, 2004 at 9:19 AM
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BOULDER, Colo., Oct. 18 (UPI) -- Americans seem to have a breathless faith in technological solutions, but the question is, is the United States dropping the ball on new technologies that could save it -- and the world -- from the wrath of climate change?

Ask a good number of citizens how the global warming problem will be addressed and most probably would answer as senior scientist Michael Glantz of the National Center for Atmospheric Research did recently: "In the eleventh hour, we're smart. We believe we'll solve it. We have faith in technology."

Glantz was kidding -- a little -- but the fact is the dramatic expansion of existing technologies and the development of new, as-yet-undiscovered ones are essential for solving the dilemma of global climate change and its corollary, reducing the world's reliance on fossil fuels.

Partisans on all sides of the climate debate throw fix-it figures at one another like so much rotten fruit, but it is difficult to calculate how much new technologies -- particularly those not yet invented or even imagined -- will cost or save.

Despite the imprecision, economic modelers in recent years have tried to project how technological development will figure into the global greenhouse problem.

Projecting the pace of new development -- called "induced technological change" -- can be an abstract process, but the idea is more than theoretical. The British government, for instance, has embarked on an ambitious program to cut its own carbon dioxide emissions by 60 percent by the year 2050, regardless of whether the Kyoto protocol is ratified, and despite the fact that, on its own, this reduction will have virtually no impact on global warming.

In taking this step, the British are banking explicitly on creating new technologies, hoping to be on the leading edge of a growth industry and therefore profiting from it.

"One of the promises to the country from the chief science adviser is that if we get into this early, we start playing the economic game in the sense that we get into the technologies that we can export to other countries that undoubtedly will need alternatives to fossil fuel energy sources," Sir David King, the government's chief science adviser, told a meeting earlier this year.

"So, we are investing in research, development and demonstration," he said.

Dan Schrag, a professor of geochemistry at Harvard University, said of the British effort: "They hope to achieve a strategic position in world energy markets. They believe that this path puts them at a strategic advantage in advanced energy technology. There are enormous economic opportunities in energy technology, but the time for investment is now."

That message does not seem to be getting through in the United States, which is lagging badly in such investment. This is despite a recent report, "Induced Technological Change and Climate Policy," by the Pew Center on Global Climate Change, which found "the presence of ITC lowers the cost of achieving emissions reductions."

The report, by Stanford University economist Lawrence Goulder, also found ITC would result in more extensive reduction of greenhouse gas emissions than otherwise might be possible.

"Climate policies can promote additional technological change, beyond what would occur anyway," Goulder told a news conference Oct. 13. Aggressive measures to address the climate issue not only rely on existing technologies, he said, but also force adaptation by creating new ideas and new solutions. This, in turn, brings costs down.

"Climate policies can induce technological change," Goulder said, adding that most economic models assessing the costs of addressing climate change do not include the ITC factor.

"A variety of climate policies can induce technological change," Goulder's report said. "These include taxes on fossil fuels, caps on CO2 emissions and subsidies to research and development in low-carbon technologies."

The report classifies the policies into two categories: direct emission policies, such as taxes and cap-and-trade standards; and technology-push policies, such as subsidies for R&D.

"In the United States at the federal level, only technology-push policies -- most prevalently in the form of subsidies to R&D -- have enjoyed political success so far," the report said.

Even there, U.S. investment has been lagging. Since 1978, Department of Energy R&D investment, adjusted for inflation, has declined from about $5.3 billion to less than $1 billion today.

The Pew Center, probably the leading U.S. voice for effective action on warming, in past reports has urged more conventional regulation -- an enforceable cap on greenhouse gas emissions, for instance -- in concert with incentives to address the climate crisis. The latest report indicates such an approach can yield a technological and, eventually, economic payoff.

The idea that regulation is good has difficult slogging ahead, however. A study by Jae Edmonds, senior staff scientist the Pacific Northwest National Laboratory's Joint Global Change Research Institute, concluded the cost of stabilizing CO2 in the atmosphere at 450 parts per million would be about 5 percent of the U.S. gross national product.

William O'Keefe, president of the George C. Marshall Institute, speaking about the now-abandoned Kyoto accords, said: "Every independent and credible analysis has concluded that it would have adverse economic impacts on most nations."

The range for the United States varies from about 1 percent to almost 4 percent reduction in GDP, O'Keefe said. That would translate into something between $130 billion and $500 billion annually -- or $2,000 to $5,000 per family.

Other studies that have included ITC and "learning by doing" scenarios -- the idea that economies get better at things with practice -- have found a considerably reduced cost.

"There is no cheap adaptation" to climate change," said John Schellnhuber, director of research for the U.K.'s Tyndall Centre for Climate Change Research, "but mitigation measures are considerably less expensive than adaptations."

Schellnhuber said CO2 can be stabilized at 450 ppm or less "at a cost of less than 1 percent of world gross domestic product."

His assertion is backed by a computer model, designed by Ottmar Edenhofer and colleagues at Germany's Potsdam Institute for Climate Impact Research. They found there is, in fact, a substantial "learning-by-doing" curve in the substitution of alternative energy sources for fossil fuels that has "a considerable impact on reducing emissions and associated welfare losses."

Goulder's report focused on U.S. costs and benefits from technology, but when asked if Schellnhuber's 1 percent of world GDP estimated seemed reasonable, he told United Press International, "It sounds like it's in the ballpark."


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