Everything from seat belts and condoms to healthcare and bank bailouts invites riskier behavior, or what economists call “moral hazard.” Even the most justified and well-meaning policy interventions can have unintended — and undesired — consequences. In the 1960s and 1970s, many environmentalists objected to nuclear power because its promise of cheap, limitless energy ran counter to their own push for energy efficiency and conservation.
The debate continues today. Which climate technologies deserve our support and which are distractions that could lull us into complacency with the false promise of a silver bullet? The list of climate “solutions” is constantly expanding and now includes everything from futuristic fusion technologies to green hydrogen, from heat pumps to induction stoves to better insulation, and — of course — solar and wind.
The media love to fawn over greentech “unicorns” (start-ups with valuations above US$1 billion) that promise to provide the breakthrough innovation we have all been waiting for, but while innovation is certainly essential, not all technologies are created equal, and lists of what counts as “climate tech” often become political litmus tests.
Many, for example, now look beyond solar to newer, sexier technologies. Yet the plummeting cost of solar energy is a result of technological breakthroughs and research and development subsidies, and the fact that it is becoming an established climate technology does not make it any less essential.
Of course, solar is not the whole solution. We cannot talk about solar without also talking about its land-use and grid implications, nor can we talk about green hydrogen without addressing the potential consequences of hydrogen leakage, a problem that has quickly turned natural gas from a promising “bridge” technology into a cause of major environmental problems.
It is right to cheer the rapidly growing electric vehicle (EV) market, but it is similarly important to consider the vast potential not only of transportation alternatives like e-bikes (or old-fashioned bicycles), but also of better cities.
Many of these debates are simply moot. It is not EVs or e-bikes; it is both. Climate beggars cannot be choosers, but debates about tradeoffs are crucial, and reveal quite a bit about our priors, priorities and worldviews. Why zero in on the folly of Germany’s nuclear phase-out 10 years ahead of its planned exit from coal, but not on German building codes, which should be a model for the rest of the world? Germany’s “well-sealed windows” do not make headlines, but investments in this admittedly boring climate technology could ultimately do more for cutting greenhouse gas (GHG) emissions than some of the most enthusiastically hyped innovations.
What really matters is the interplay between technology, policy and behavioral change. While induction stoves alone will not make a big dent in global or personal GHG emissions, swapping an old gas range for a new induction stove is often the last step before shutting off a home gas line altogether.
Induction stoves and heat pumps are the two main climate technologies that have allowed new buildings to go without gas altogether. And as everyone needs to eat and regulate the temperature in their home, neither technology creates much moral hazard.
Now consider carbon-removal technologies. They, too, have a crucial role to play in bringing about a low-carbon future, and yet they also hold the promise — justified or not — of allowing us to keep chugging along without changing our production and consumption patterns.
What to preserve is a political question. While some will welcome EVs as a way to decarbonize their suburban commutes, others will see a new moral hazard. After all, the more efficient cars become, the more guilt-free driving we can do.
Rather than preserve long commutes, why not use zoning changes to create more walkable neighborhoods? Rather than always surveying the cutting edge, we can find some of the most powerful technofixes already at work in the real world.
Just look at the traditional European city. As Andrej Karpathy, the former head of artificial intelligence at Tesla, marvels, it is “more compact, denser ... [more] pedestrian/bike friendly.”
A final consideration is how some climate technologies might introduce the exact opposite of moral hazard. Solar geoengineering, for example, might be considered to be so radical and controversial that the mere mention of it could motivate us to cut more carbon pollution sooner.
Of course, people must not bank on this effect. That, ironically, would be another case of falling into the moral-hazard trap.
How, then, to assess whether any given climate technology will deliver as promised? While there is no foolproof method, much can be learned from looking at the degree of decarbonization that has already been achieved. By and large, there are dozens of ways to cut emissions by 5 percent, 10 percent, or even 20 percent in each industry or economic sector. Most of these involve small process changes aimed at teasing out additional efficiencies. A more efficient gas furnace, for example, will reduce a fuel bill and emissions by 10 percent or 20 percent overnight, and much the same can be said for a more efficient turbine at the gas plant.
However, making existing fossil fuel-based processes more efficient can go only so far. Moving well beyond the 20 percent cuts to 80-90 percent or more typically means switching from fossil fuels to zero-carbon energy sources. In most sectors, there are really only one or two ways to cut emissions by that much. In the construction sector, for example, large cuts require installing insulation and heat pumps. In steel, the two options involve green hydrogen or full-on electrification, with a closed-loop carbon-recycling system emerging as a strong contender for a third path.
The key question when considering climate moral hazard, then, is whether a technology moves a company, industry, or sector closer to implementing an 80-100 percent solution, as opposed to a 10 percent or 20 percent measure that merely kicks the can down the road.
A new EV will not cut transportation emissions to zero by itself — not until firms have also decarbonized the steel used to make it and the electricity that powers it.
It at least holds the potential to be an 80-100 percent solution.
It is moral hazard to think that technology will save us. However, it is equally hazardous to ignore innovations that could be game changers if they are accompanied by the right kinds of policies, investments and political commitments. Whether a climate solution creates a moral hazard has little to do with the solution itself and everything to do with us.
Gernot Wagner is a climate economist at Columbia Business School.
Copyright: Project Syndic
As China’s economy was meant to drive global economic growth this year, its dramatic slowdown is sounding alarm bells across the world, with economists and experts criticizing Chinese President Xi Jinping (習近平) for his unwillingness or inability to respond to the nation’s myriad mounting crises. The Wall Street Journal reported that investors have been calling on Beijing to take bolder steps to boost output — especially by promoting consumer spending — but Xi has deep-rooted philosophical objections to Western-style consumption-driven growth, seeing it as wasteful and at odds with his goal of making China a world-leading industrial and technological powerhouse, and
For Xi Jinping (習近平) and the Chinese Communist Party (CCP), the military conquest of Taiwan is an absolute requirement for the CCP’s much more fantastic ambition: control over our solar system. Controlling Taiwan will allow the CCP to dominate the First Island Chain and to better neutralize the Philippines, decreasing the threat to the most important People’s Liberation Army (PLA) Strategic Support Force (SSF) space base, the Wenchang Satellite Launch Center on Hainan Island. Satellite and manned space launches from the Jiuquan and Xichang Satellite Launch Centers regularly pass close to Taiwan, which is also a very serious threat to the PLA,
During a news conference in Vietnam on Sept. 10, a reporter asked US President Joe Biden about the possibility of China invading Taiwan. Biden replied that Chinese President Xi Jinping (習近平) is too busy handling major domestic economic problems to launch an invasion of Taiwan. On Wednesday last week, China’s Taiwan Affairs Office published a document outlining 21 measures to make the Chinese-controlled Fujian Province into a demonstration zone for relations with Taiwan. The planned measures would expand favorable treatment for Taiwanese people and companies, and seek to attract people from Taiwan to buy property and seek employment in Fujian.
More than 100 Chinese People’s Liberation Army (PLA) vessels and aircraft were detected making incursions into Taiwan’s air defense identification zone (ADIZ) on Sunday and Monday, the Ministry of National Defense reported on Monday. The ministry responded to the incursions by calling on China to “immediately stop such destructive unilateral actions,” saying that Beijing’s actions could “easily lead to a sharp escalation in tensions and worsen regional security.” Su Tzu-yun (蘇紫雲), a research fellow at the Institute for National Defense and Security Research, said that the unusually high number of incursions over such a short time was likely Beijing’s response to efforts