The Limiting Factor In Mitigating Climate Change Is Now Red Tape
From Leah Stokes, a political scientist (and climate policy expert) at UCSB:
I’m trying to electrify my home in Santa Barbara. The time it takes to get permits to change my house is about a year. I’m still burning gas in my house for that year. Now we’re going back and forth about what kind of heat pump I can use. None of the system is oriented around climate being the most important thing.
In the New York Times, Ezra Klein writes (emphasis added):
[Many current environmental laws] were built for an era when the issue was that the government was building too much, with too little environmental analysis. The core problem of this era is that the government is building too little, in defiance of all serious environmental analysis. … Modest expansions to affordable housing or bus service are forced to answer for their environmental impact. But the status quo doesn’t have to win any lawsuits or fill out any forms to persist.
This tweet from Alan Cole really drives the point home:
The US has 42 MW of offshore wind production that is operational, 932 MW under construction, and 18,581(!) MW tied up in permitting.
To decarbonize the economy, many things have to come together – scientific, technical, economic, political, and societal changes are all needed. In recent years, there has been rapid progress across the board. We’re ready to build the carbon-free economy. The one big impediment that we haven’t addressed? It’s the bureaucratic barriers that get in the way of all change, even environmentally beneficial change.
Friction Is Insidious
Red tape adds delay, uncertainty, cost, and hassle to a project. But that’s not the end of the problem; in fact, it’s the best-case scenario. Worse is all the projects that are never initiated in the first place, because the barriers make the project uneconomical or simply too much trouble. Those projects won’t show up in any statistics, but they are a real cost of regulation.
Delays are also hard on innovation. To get a new technology from the laboratory to planet-wide scale requires many rounds of deployment and iteration. Permitting, public commentary, and approval processes can add years to each round, adding up to decades of delay before we get emissions under control. We don’t have decades to waste.
The Inflation Reduction Act contains a wide array of provisions, all aimed at building more stuff. If we can’t build – if we can’t build now – we’ll squander a massive opportunity. For example, there are tax credits to stimulate sales of electric vehicles, but right now everything is sold out for months in advance. I’m in the market for a new car, and I literally can’t find an EV to test drive; no dealer has one on the lot. What’s the point in stimulating sales of a product you can’t buy?
Change Used To Be Bad, Now It’s Good
Humankind has been transforming the environment since the dawn of agriculture, if not longer. Environmentally speaking, almost all of these changes have been negative. So our entire history, culture, and intuitions developed in an era where protecting the environment means preventing change. Virtually all changes were bad, so our entire mindset is oriented around protection through change prevention.
In other words, from an environmental perspective, the status quo was always preferable to the likely future, and so the environmentally friendly approach to new projects has been to oppose them1.
For perhaps the first time in human history, we’re entering an era where the status quo – a fast train to intolerable warming – is worse than the achievable future. Through the heroic efforts of countless people, we now have path to replace our fossil-fuel-based economy with something cleaner. Regulations that retard progress are no longer automatically aligned with protecting the environment. The status quo is bad, so we need to eliminate barriers to changing it.
Regulation Favors The Incumbent
Regulations tend to lock in the status quo. Per the earlier quote from Ezra Klein, the world is full of coal plants and gasoline refineries, that “[don’t] have to win any lawsuits or fill out any forms to persist”. Even when it comes to new construction, large incumbent businesses have the experience, regulatory connections, and pocketbook to navigate the system more easily than a newcomer, even a newcomer that is theoretically “better” in the ways that the regulation is meant to encourage. (See also: “regulatory capture”.)
Let ‘Em Drill, They Won’t Anyway?
Suppose we could wave a magic wand and make it easier (and faster!) to get permits for wind farms, new electricity lines, and other green projects; but as a tradeoff, we also had to remove barriers to fossil fuel projects.
I was going to write about how this would be a great deal because fossil fuel projects aren’t being built anyway. The writing is on the wall: gasoline cars are on the way out, renewable electricity is on the way in, and there are headlines like Half world’s fossil fuel assets could become worthless by 2036 in net zero transition. I keep reading2 about this; for instance, supposedly, one of the reasons oil prices are so high right now is that no one wants to invest in new capacity, even with the restrictions on Russian supply, basically because there's no perceived future in the fossil fuel market. If someone starts drilling a new oil well today, it might be profitable for a few years, but it will become a stranded asset before the initial investment is paid off.
Unfortunately, I didn’t keep track of any sources for this, and when I went now to look for evidence, I couldn’t find it. (Admittedly, I didn’t look very hard. I have a short attention span for research.) So rather than asserting that throwing open the regulatory floodgates wouldn’t lead to many new oil or gas wells, I’m going to leave it as a question to be pondered. Would it be a good deal to streamline barriers to change if we were forced to include fossil fuel projects in the deal? (If you have evidence in either direction, send it my way!)
In any case, it’s not a good idea to squash supply of fossil fuels until renewables are ready to step up. With Russian oil and gas supplies somewhat cut off, the coming winter – possibly several winters to come – are going to be horrible in Europe and elsewhere. We don’t want any of that to be blamed on the environmental movement. The message needs to be “look how unreliable fossil fuels are, let’s build renewables”, not “the economy is collapsing and people are freezing in their apartments because those green freaks didn’t let us drill”.
It’s Time To Get Serious About Saving The Planet
The lengthy process to get things built in the US is seriously impeding our ability to reduce emissions. That includes, though is certainly not limited to, laws like NEPA (which requires an environmental impact statement for federal actions with major environmental impact).
It’s possible to streamline these barriers. For instance, a bill requiring “instant, online solar permitting” for residential projects in most of California just passed the legislature and awaits Gov. Newsom’s signature.
We do need to be careful not to throw the baby out with the bathwater. The mere fact that a project yields carbon-free power or otherwise reduces greenhouse emissions doesn’t trump all other considerations; some project sites are legitimately inappropriate, and most projects probably need to be adapted in one way or another to mitigate impacts on the surrounding community. The tendency to site projects in disadvantaged communities won’t end when we go green, even if living next door to a wind farm is preferable to an asthma-inducing power plant. We need checks and balances to ensure that these considerations are addressed. But we need to do that in a way that doesn’t add years of delay and uncertainty to each project.
For a long time, it was reasonable to say that the chief barriers to mitigating emissions were scientific, technical, or economic. We needed more research, more pilot projects, and more funding. But increasingly, the research has been done, the pilots have been successful, and – especially now that the IRA has passed – the funding is there. Now, our big challenge is to build. Five-year review review cycles are not a law of nature, they are a choice. It’s time we make a different choice.
Obviously I’m simplifying here. Banning DDT and eliminating leaded gasoline were good changes. So was the Montreal Protocol. Habitat restoration is a thing. But you get my point: there have been a lot more harmful projects than helpful ones.
And/or, um, “podcastconsumifying”? We need an actual word for that.
"And/or, um, “podcastconsumifying”? We need an actual word for that."
YES. We do. Speaking of citations that I lose and can't find again ... I need a way to search through every podcast I've ever heard.
(And thanks, as always, for the thoughtful newsletter! I continue to enjoy and learn from them)
I have some amount of empirical evidence on the move away from petro/petrochemical. I admit I don't know how this holds US/World-Wide. This put me on a hunt to find some stats that back up what I've observed.
We've seen a big downturn of employment in manufacturing jobs in Louisiana over the last two decades. Down 30% from its peak in '97. Louisiana's economy is largely "manufacturing" which hides the ball a bit.
Manufacturing in Louisiana is largely related to oil/gas refinement and chemical products (largely petro related) . It's actually made me wonder what happens in Louisiana if the world sharply shifts towards renewables. I see no attempts at diversifying our economy, and certainly not to the level states like Texas have over the years.
Louisiana Economy Breakdown: https://www.statista.com/statistics/1064986/louisiana-real-gdp-by-industry/
Louisiana Manufacturing Breakdown: https://www.nam.org/state-manufacturing-data/2020-louisiana-manufacturing-facts/
Louisiana Manufacturing jobs statistics: https://fred.stlouisfed.org/series/SMU22000003000000001A