High Stakes Climate Poker

January 17, 2014


James Byrne in The Guardian:

My friends and I get together once a month to play Texas HoldEm poker – great conversation, a few drinks, snacks and laughs. But I don’t like high-stakes poker. Gambling with high-value is not a wise choice, particularly if the pain of the loss translates beyond oneself.

The fossil fuel industry is bluffing society in a multi-trillion dollar high-stakes poker game. Current reserves of fossil fuels are five times morethan we can afford to burn if we want to keep global warming to less than 2°C; and we have to keep global warming below 2°C. The net worth of fossil fuel corporations, the value of their chip stack, is based on fully exploiting these reserves. Financial leaders are expressing great concerns about betting on fossil fuels. Forbes magazine says,

“Groups as diverse as Shell, Mercer, HSBC, prominent insurance companies and re-issuers, Standard & Poor’s and the International Energy Agency (IEA) have been giving clear warning signs about continuing to invest in fossil fuels.”

But fossil fuel-based corporations are still bluffing. They want expanded fossil fuel use; making massive investments in oil exploration, hydraulic fracturing for oil and natural gas, and the Canadian tar sands. The latter two are particularly bad bets given their large greenhouse gas footprints, water, soil and air pollution problems; and tar sands need 40 years to recover the costs of multi-billion dollar plants.

Why are fossil fuels a bad bet? (1) Continued use threatens our basic societal foundations through pollution, environmental disruption and growing health costs and infrastructure losses (fires, floods, droughts, heat waves, sea level rise, more violent weather, urban pollution and health); (2) the International Monetary Fund (IMF) says current fossil fuel subsidies are $1.9 trillion per year – these must be eliminated – that will make fossil fuels more expensive; (3) greater external costs of carbon taxes and emissions trading will be assigned to fossil fuels, make them more expensive; (4) renewable energy sources are competitive now and will be more so given fewer external costs than fossil fuels; and, (5) there is a growing fossil fuel divestment movement that major financial managers fear.

Who really has the big chip stacks? The 2006 Stern Report on the Economics of Climate Change put the annual costs of transitioning to a renewable energy economy at about 1% of global GDP; about $850 billion. Is that a big bet? Well, current annual global subsidies to fossil fuels are about $1.9 trillion. The Climate Vulnerable Forum Report in 2012 estimated that humanity is now incurring about $1.2 trillion in losses every year due to climate change, and rising. That is 1.6% of global GDP. Oil consuming nations would spend a record $2 trillion on oilin 2012, $500 billion on natural gas, and $500 billion on coal. So the annual costs to continue using fossil fuels is over $6 trillion, whereas we need to spend only $850 billion to switch to renewable energy and fix climate change.

The fossil fuel industry’s bluff takes balls: they are betting humanity will continue to pay over $6 trillion annually to burn fossil fuels rather than $850 billion to convert to renewable energy. Worse, they are betting humanity will pay trillions for increasing climate change adaptation costs while we pay trillions for fossil fuels. The fossil fuel industry is demanding humanity go on buying and burning unneeded fossil fuel reserves as the climate radically warms … all so these carbon kings can stay flush. Fossil fuel magnates and plutocrats are betting many billions more in a frenzied, massive exploration push to add to unneeded fossil fuel reserves.

There are other big chip stacks in the pot. We all know air pollution causes many diseases. The health care costs for treating fossil fuel pollution related disease are among the biggest chip stacks. A 2012 US EPA paper says the hidden health costs of pollution from fossil fuel electricity generation alone are 2–6% of US GDP – that is $300–900 billion! The USA has 4% of the global population and has reasonable pollution control technology. Global health cost equivalents must be many trillions of dollars.

Who is dying from fossil fuel pollution? Leading research agencies are debating the explicit numbers, but the best estimates are alarming. The World Health Organization estimated that climate change kills 150,000 people every year. The Climate Vulnerable Forum Report says the number of deaths is 400,000. The Canadian Medical Association Journal says 21,000 Canadians die prematurely due to fossil fuel pollution every year in Canada. The Lancet estimated that China suffers 1.2 million premature deaths due to fossil fuel pollution.

Canada has some of the best air pollution controls; China has some of the worst air pollution globally. But the death rate per million of population is similar: 700 in Canada, 900 in China. Extrapolating the Canada-China average death rate suggests 5.6 million people die every year due to fossil fuel pollution. We can debate the exact numbers; nevertheless, the magnitude is horrifying. Millions of people are dying every year due to fossil fuel air pollution, and deaths are increasing as the world burns more fossil fuels.

STOP this gamble. Fossil fuels are a losing hand for humanity. Clean, safe renewable energy wins for all of us. We can bet on it.

James Byrne is a climate scientist and Professor at the University of Lethbridge, Canada. He has published extensively on the impacts of climate change on water, ecosystems and society; served as an expert reviewer of many oil sands environmental impacts reports; was Program Committee Education Co-Representative, American Geophysical Union (AGU) Fall Meeting 2010-12; and co-convened the AGU Chapman Conference on Climate Communication and Education in June 2013.

7 Responses to “High Stakes Climate Poker”

  1. […] James Byrne in The Guardian: My friends and I get together once a month to play Texas HoldEm poker – great conversation, a few drinks, snacks and laughs. But I don't like high-stakes poker. Gamblin…  […]

  2. ubrew12 Says:

    I thought this was a very important article because the (often unstated) fear deniers have about addressing Global Warming is over cost. And ironically, given how quick they are to point out the minor shortfalls in Climate Prediction, they are never able to reliably QUANTIFY that fear (i.e. that cost).

    To do a short recap from this article: The cost of transitioning to a non-fossil energy economy is 1% of GDP (Stern Report, 2006). For the World, that’s $0.9 trillion a year. Are there any savings? $3 trillion in fossil fuel we no longer have to buy. $1.9 trillion in government subsidies to fossil fuel corporations. And $1.2 trillion annually in Climate-Change damage (that’s the estimate for 2012, but will rise over time).

    Now, there’s a small but significant chance Global Warming is going to extinguish our great-grandchildren. Any volunteers to tell them we couldn’t fix this because we would have saved too much money?

    • dumboldguy Says:

      Well stated, and a good argument, but the point has never been “saving money”. It has always been about preserving the profits of the fossil fuel interests and the global plutocracy. The deniers have been co-opted (to be generous) or outright bought-and-paid-for by the Kochs and their ilk. Until we have some catastrophes in the “right now” that start “extinguishing” humans of any generation in significant numbers, the deniers will continue to be willfully ignorant.

      • greenman3610 Says:

        next time you hear the “cost” argument, make it clear that there is NO scenario where we don’t spend trillions on energy and infrastructure in the coming 3 decades – or, that is, the alternative is to sink to developing world status here in the US.
        Our grid is at that level now, and failure to upgrade is ceding the new century to others.
        As far as the energy itself, its simply a choice between renewable and the same old same old – an overwhelming percentage of folks prefer renewables for the long term, just don’t realize how far we’ve come with them in the last 2 decades..

      • Its not just profit. They want hegemony. Its all about power and keeping it. They are king and they want to stay that way. For them “we can adapt to that” is all about us adjusting our hands and knees so they can use us as a footstool better.

        • dumboldguy Says:

          Yep. Feudalism is the most successful economic/government system ever seen on the planet. If we sit still for what it will mean to the individual, it could become dominant again. A benign form of corporate-fascist-feudalism is definitely a possibility for our future.

  3. MorinMoss Says:

    “We have to keep warming below 2 deg C” – yes, but how much below?

    I would argue that even the warming we’ve had up to now is too much but I’m not an expert.

    And what would it take to reduce CO2 to 350 ppm and how long would it take?
    Waiting on Nature to do it in less than a century while our global population continues to rise isn’t plausible even if a lot of us give up meat.

    How much of an increase in total biomass is needed for a 50 ppm reduction in CO2?

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