Case for Interventionist Climate Policy

Paul Walter
December 7, 2018

Submitted as coursework for PH240, Stanford University, Fall 2018

Introduction

Fig. 1: Anthracite Coal. (Source: Wikimedia Commons)

Fossil fuels are fantastic. As products for energy generation through combustion, fossil fuels, specifically hydrocarbons, are arguably the best from an energy density and usability perspective. Life on Earth even evolved to store its energy as hydrocarbons in the form of fats and sugars. During the Industrial Revolution, coal powered the steam engines that moved boats and trains. For most of its existence, electricity generation derived its power mostly from coal combustion. [1] Coal is also important in the production of valuable, modern materials such as steel, activated carbon, carbon fiber, and silicon metal. Furthermore, high-grade coal such as the anthracite coal shown in Fig. 1 was significant for heating homes. Coal is just one of the amazing fossil fuels that powers modern life; petroleum products are outstanding as well. Oil becomes the gasoline and diesel that powers the internal combustion engines used in most cars. Jet fuel is a petroleum derivative. And like coal, petroleum products are also useful in the synthesis of materials, namely plastics and asphalt. Combustion of natural gas for electricity generation is super efficient, and in theory, ideal combustion of natural gas does not produce any of the six criteria pollutants: ozone, particulate matter, carbon monoxide, lead, sulfur dioxide, and nitrogen dioxide.

History and Advantages of Fossil Fuels

In fact, at the beginning of fossil fuel usage, there were few issues with using fossil fuels at all. Air pollution was a negative component, but the ascent from an agrarian to industrial society and the associated benefits justified the environmental costs. Furthermore, during the early years of fossil fuel dominance, carbon dioxide emissions may have averted a second ice age that would have harmed human civilization. [2] Fossil fuels were stupendous; they were too good.

After enabling global society to support 6.5 billion more people, the increased scale and usage of fossil fuels began to amplify the otherwise acceptable downsides of fossil fuel usage. Air pollution became worse in parts of the world, but many nations adopted policies to curtail the effects. More than anything, the emission of carbon dioxide into the atmosphere, which had been small, became the principal issue associated with fossil fuel combustion. Emissions were so large that humans changed the composition of the atmosphere by 0.012% from about 280 ppm to now at least 400 ppm of carbon dioxide. Although the change may seem small by comparison to the massiveness of the atmosphere, the nominal difference is astounding.

Today, fossil fuels continue to be too good. Only one fossil fuel, coal, has ever lost a competition to another energy resource, and it lost to a different fossil fuel, natural gas. [3] Coal power plants are starting to disappear not because of renewable energy, but because of an abundance of efficient, versatile, cleaner natural gas. The oil and gas revolution due to innovation in horizontal drilling and hydraulic fracturing is the cause of natural gas sudden ascendancy. The versatility and relative abundance of fossil fuels make their extraction and usage economically attractive despite developments in green tech. It may be true that electricity generation through wind and solar is cheapest on an LCOE level, but those resources will continue to face stiff competition from natural gas in the electricity sector. In the transportation sector, electric cars may displace conventional combustion engines in the future, but currently, gasoline maintains its iron grip.

Conclusion

In light of these facts, policy is absolutely necessary to create artificial badness in the otherwise amazing fossil fuels. The small drawbacks of greenhouse gas emission and air pollution are not enough to tip the scales in favor of renewable, decarbonized energy sources. Mere support of renewables from governments will not be enough to make a significant attack against the overpowered player that is fossil fuels. Whether it be a carbon tax or cap and trade system, institutions need to handicap fossil fuels in order to have a significant impact on carbon dioxide emissions. There are few other options available; fossil fuels are simply too good.

© Paul Walter. The author warrants that the work is the author's own and that Stanford University provided no input other than typesetting and referencing guidelines. The author grants permission to copy, distribute and display this work in unaltered form, with attribution to the author, for noncommercial purposes only. All other rights, including commercial rights, are reserved to the author.

References

[1] A. Harvey, A. Larson, and S. Patel, "History of Power: The Evolution of the Electric Generation Industry," Power Magazine, 1 Oct 17.

[2] A. Ganopolski, R. Winkelmann, and H. J. Schellnhuber, "Critical Insolation-CO2 Relation for Diagnosing Past and Future Glacial Inception," Nature 529, 200 (2016).

[3] J. Taylor, "Closing Coal Power Plants, Replacing With Natural Gas, Makes Economic Sense," Forbes, 26 Feb 18.