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On offshore giants, cheap EVs, and heat tolerant coral
Current conditions: The U.K. government is warning people to prepare for flooding this winter • Hurricane forecasters are keeping a watchful eye on another storm lurking in the Atlantic • The Orionid meteor shower will peak this week, but a bright moon is likely to reduce visibility.
Despite two back-to-back devastating, record-breaking hurricanes in the southeast in recent weeks, Republican lawmakers are not considering pushing for more government action on climate change, E&E News reported. The outlet contacted 42 members of the House and Senate, “asking if they believed the severity of the storms were exacerbated by global warming and if those storms would motivate lawmakers to endorse reducing greenhouse gas emissions — many of them from burning fossil fuels — that scientists call the major cause of climate change.” Just three of the politicians responded, and none of them were willing to connect the storms’ severity to climate change, let alone fossil fuel emissions.
The Paris Auto Show, the largest car show in Europe, kicks off today. The focus this year is on low-cost electric vehicles as some governments cut their EV subsidies, EU emissions standards loom next year, and European manufacturers try to compete against Chinese rivals. Some new models to know about, and their European price tags:
Nine Chinese brands will be unveiling their latest models, Reutersreported, and BYD will have the largest presence.
The Renault R4 Renault
The first attempt to selectively breed adult coral to be more tolerant to heat looks like it was a success. In a study published today in the journal Nature Communications, researchers found that selecting parent colonies for high heat increased the heat tolerance of adult offspring. “Our finding on the heritability of coral heat tolerance indicates that selective breeding could be a viable tool to improve population resilience,” the researchers wrote. But they also warned that the tolerance they selected for is unlikely to be enough to keep up with the pace of global warming. They call for further research to scale and optimize selective coral breeding.
Chinese company Dongfang Electric Corp. over the weekend announced it has built a new offshore wind turbine with a power-producing capacity (26 megawatts) that is 31% bigger than its nearest competitor (18 MW), and “surpasses even the largest models announced but not yet constructed,” Bloombergreported. Big turbines that generate lots of power can reduce the costs of offshore wind operations by limiting the amount of equipment needed. China is a leader in both offshore wind installations and large turbines. Last week another Chinese company, CRRC Corp., said it had made the world’s largest floating offshore wind turbine, with “a diameter of 260 meters and a swept area of 53,100 square meters, roughly the size of seven standard soccer fields.”
The White House today will commemorate the designation of the Chumash Heritage National Marine Sanctuary, a 4,543-square-mile area of ocean off the coast of California that is to be protected from oil and gas drilling and mining. The sanctuary will be the third largest in the U.S., and the first to be led by Indigenous people, the Northern Chumash Tribe. NPR noted that the protected area is smaller than initially proposed in order to accommodate potential offshore wind operations and subsea electrical transmission cables, but NOAA said it “will consider a potential expansion of the sanctuary in the coming years, after transmission cables have been laid.”
“I’m sure when we went from buggies to cars people complained about that. It’s a transition.”–Andy Edmondson, a school superintendent in Illinois, on community skepticism around electric school buses.
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Daron Acemoglu and William Nordhaus have some disagreements.
This year’s Economics Nobel is not a climate prize — that happened in 2018, when Yale economist William Nordhaus won the prize for his work on modeling the effects of climate change and economic growth together, providing the intellectual basis for carbon taxation and more generally for regulating greenhouse gas emissions because of the “social cost” they impose on everyone.
Instead, this year’s prize, awarded to MIT’s Daron Acemoglu and Simon Johnson and University of Chicago’s James Robinson is for their work demonstrating “the importance of societal institutions for a country’s prosperity,” i.e. why some countries are rich and others are poor. To do so, the trio looked at the history of those countries’ institutions — laws, modes of government, relationship between the state and individuals — and drew out which are conducive to wealth and which lead to poverty.
Long story short, “extractive” institutions set up to reward a narrow elite tend to hurt economic development over time, as in much of Africa, which was colonized by Europeans who didn’t actually live there. “Inclusive” institutions, by contrast, arose in the United States and Canada, where there was significantly more European migration, thus incentivizing the ruling elite to set up institutions that benefitted a broader range of (again, European) residents.
While this research rests heavily on the climate (the reason Europeans avoided African colonies was because of the high rate of disease in tropical climates), it does not touch on climate change specifically. But Acemoglu especially is an incredibly wide-ranging scholar and has devoted some time to the specific questions of climate change — and in so doing has been a direct critic of Nordhaus, Stockholm’s preferred climate economist.
“Existing approaches in economics still do not provide the right framework for managing the problems that will confront us over the next several decades,” Acemoglu wrote in a 2021 essay titled “What Climate Change Requires of Economics,” referring directly to Nordhaus’s Nobel-winning work. “Although the economics discipline has evolved over time to acknowledge environmental risks and costs, it has yet to rise to the challenge of climate change. A problem as massive as this one will require a fundamental reconsideration of some of the field's most deeply held assumptions.”
His criticisms included that Nordhaus’s more gradualistic approach — the latest version of his model spits out that a 1.5 degree Celsius warming target is “infeasible,” and the “cost vs. benefit optimal” amount of warming as 2.6 degrees Celsius over pre-industrial levels with a carbon price that rises to $115 per ton by 2050 — ignores both the best way to reduce emissions and the risk of not doing so fast enough.
Acemoglu is far more optimistic about how policy can direct technological development and less sanguine about additional warming over and above the Paris Agreement limits. He argues that the possibility of theoretical “tipping points,” where exceeding certain climate thresholds by even a small amount may cause dramatic damages, make the risk of such overshoot far too great.
He also took issue with the discount rate applied to spending later vs. spending now in Nordhaus’s models. The basic idea is that a dollar spent today to mitigate the effects of climate change is more valuable than one spent in 2050. But the rates Nordhaus uses — which he derives from real-world investment returns — implies that in order for spending now to be worth it later, the benefits in 2050 or 2100 must be very, very large.
“There is a plausible economic (and philosophical) case to be made for why future essential public goods should be valued differently than private goods or other types of public consumption,” Acemoglu wrote in 2021, arguing that discount rates derived from investment returns, like the ones Nordhaus uses, might not be the best guide to public policy.
So what does the latest Nobel laureate want instead? Well, something like what the United States has been doing the past few years.
Accounting for the economic benefits of domestic or “endogenous” technological development, Acemoglu’s research finds that "the transition to cleaner energy is much more important than simply reducing energy consumption, and that technological interventions need to be redirected far more aggressively than they have been.” He explored how this process could work in papers he wrote over more than a decade, developing a model for this kind of directed technological change and applying it to the United States, starting as far back as 2012.
Across all his work on climate change, Acemoglu argues that a focus on pricing the “externalities” of carbon emissions — the harm emissions impose on everyone that isn’t reflected in the prices of fossil fuels — is myopic. Instead, the challenge is both restricting emissions and fostering clean technologies that can take the place of dirty ones, which have had a remarkable head start in investment.
In “The Environment and Directed Technical Change,” published in 2012 and co-written with Philippe Aghion, Leonardo Bursztyn, and David Hemous, Acemoglu argues that a mixture of carbon taxes and research subsides could “redirect technical change and avoid an environmental disaster” by imposing a cost on dirty technology and boosting clean technology.
Such an approach would probably rest heavily on positive subsidies and encouraging clean technology and less on a carbon tax, the four write (although a carbon tax would still help to “discourage research” into polluting technologies). It would also need to happen soon.
“Directed technical change also calls for immediate and decisive action in contrast to the implications of several exogenous technology models used in previous economic analyses.”
This framework does not precisely match United States policy — we have no carbon tax — but it does somewhat approximate it. The Biden administration’s approach to climate policy centers on large-scale investments in clean technologies, whether they’re tax credits for non-carbon-emitting electricity production or financing for clean energy projects from the Loan Programs Office, combined with a suite of Environmental Protection Agency rules that are intended to reduce pollution from fossil fuel power plants (along with an actual direct fee on methane emissions).
This approach is embedded within an overall industrial policy that’s supposed to make the economy more productive — a counter-argument to the idea that climate spending is an economic drag that trades off with environmental harms in the future. Acemoglu, too, questions the idea that there’s a tradeoff between economic growth and spending to combat climate change. Not only could renewables be cheaper than fossil fuels, “an energy transition can improve productive capacity and thus lead to an expansion of output, because transition to cleaner technologies can boost investment and the rate of technological progress,” he and his co-authors write.
Acemoglu has also weighed in on one the more controversial questions in climate policy and economics: the shale gas boom. In a 2023 paper written, again with Aghion, Hemous, and Lint Barrage, he weighed the effects of dramatic increase of domestically extracted natural gas, focusing on the importance of technological development. The Environmental Protection Agency attributes the decline in US greenhouse gas emissions since 2010 in part to “the growing use of natural gas and renewables to generate electricity in place of more carbon-intensive fuels,” due to natural gas replacing coal electricity generation. While this logic has come under fire from some activists and researchers who say the government’s models underestimate methane leakage from natural gas operations, Acemoglu took a different tack.
Yes, natural gas substituting for coal reduces short-run emissions, he and his co-authors concluded, but also, “the natural gas boom discourages innovation directed at clean energy, which delays and can even permanently prevent the energy transition to zero carbon.” They backed up this assertion by pointing to a decline in the total share of patents rewarded to renewable energy innovation between 2009 and 2016.
The way out is that same mix of carbon prices and technology subsidies Acemoglu has been recommending in some form since Kelly Clarkson was last on top of the charts, which “enables emission reductions in the short run, while optimal policy would ensure that the long-run green transition is not disrupted.”
If the Biden Administration’s climate policy works out, it will look something like that, and the prize will be far greater than anything given out in Stockholm.
It’s flawed, but not worthless. Here’s how you should think about it.
Starting this month, the tens of millions of Americans who browse the real-estate listings website Zillow will encounter a new type of information.
In addition to disclosing a home’s square footage, school district, and walkability score, Zillow will begin to tell users about its climate risk — the chance that a major weather or climate event will strike in the next 30 years. It will focus on the risk from five types of dangers: floods, wildfires, high winds, heat, and air quality.
The data has the potential to transform how Americans think about buying a home, especially because climate change will likely worsen many of those dangers. About 70% of Americans look at Zillow at some point during the process of buying a home, according to the company.
“Climate risks are now a critical factor in home-buying decisions,” Skylar Olsen, Zillow’s chief economist, said in a statement. “Healthy markets are ones where buyers and sellers have access to all relevant data for their decisions.”
That’s true — if the information is accurate. But can homebuyers actually trust Zillow’s climate risk data? When climate experts have looked closely at the underlying data Zillow uses to assess climate risk, they have walked away unconvinced.
Zillow’s climate risk data comes from First Street Technology, a New York-based company that uses computer models to estimate the risk that weather and climate change pose to homes and buildings. It is far and away the most prominent company focused on modeling the physical risks of climate change. (Although it was initially established as a nonprofit foundation, First Street reorganized as a for-profit company and accepted $46 million in investment earlier this year.)
But few experts believe that tools like First Street’s are capable of actually modeling the dangers of climate change at a property-by-property level. A report from a team of White House scientific advisors concluded last year that these models are of “questionable quality,” and a Bloomberg investigation found that different climate risk models could return wildly different catastrophe estimates for the same property.
Not all of First Street’s data is seen as equally suspect. Its estimates of heat and air pollution risk have generally attracted less criticism from experts. But its estimates of flooding and wildfire risk — which are the most catastrophic events for homeowners — are generally thought to be inadequate at best.
So while Zillow will soon tell you with seeming precision that a certain home has a 1.1% chance of facing a wildfire in the next 30 years, potential homebuyers should take that kind of estimate with “a lot of grains of salt,” Michael Wara, a senior research scholar at the Stanford Woods Institute for the Environment, told me.
Here’s a short guide for how to think through Zillow’s estimates of climate risk.
Neither First Street nor Zillow immediately responded to requests for comment.
Zillow has said that, when the data is available, it will tell users whether a given home has flooded or burned in a wildfire recently. (It will also say whether a home is near a source of air pollution.)
Homebuyers should take that information seriously, Madison Condon, a Boston University School of Law professor who studies climate change and financial markets, told me.
“If the house flooded in the recent past, then that should be a major red flag to you,” she said. Houses that have flooded recently are very likely to flood again, she said. Only 10 states require a home seller to disclose a flood to a potential buyer.
First Street claims that its physics-based models can identify the risk that any individual property will flood. But the ability to determine whether a given house will flood depends on having an intricate knowledge of local infrastructure, including stormwater drains and what exists on other properties, and that data does not seem to exist in anyone’s model at the moment, Condon said.
When Bloombergcompared the output of three different flooding models, including First Street’s, they agreed on results for only 5% of properties.
If you’re worried about a home’s flood risk, then contact the local government and see if you can look at a flood map or even talk to a flood manager, Condon said. Many towns and cities keep flood maps in their records or on their website that are more granular than what First Street is capable of, she said.
“The local flood manager who has walked the property will almost always have a better grasp of flood risk than the big, top-down national model,” she said.
In some cases, Zillow will recommend that a home buyer purchase federal flood insurance. That’s generally not a bad idea, Condon said, even if Zillow reaches that conclusion using national model data that has errors or mistakes.
“It simply is true that way more people should be buying flood insurance than generally think they should,” she said. “So a general overcorrection on that would be good.”
If you’re looking at buying a home in a wildfire-prone area, especially in the American West, then you should generally assume that Zillow is underestimating its wildfire risk, Wara, the Stanford researcher, told me.
That’s because computer models that estimate wildfire risk are in a fairly early stage of development and improving rapidly. Even the best academic simulations lack the kind of granular, structure-level data that would allow them to predict a property’s forward-looking wildfire risk.
That is actually a bigger problem for homebuyers than for insurance companies, he said. A home insurance company gets to decide whether to insure a property every year. If it looks at new science and concludes that a given town or structure is too risky, then it can raise its premiums or even simply decline to cover a property at all. (State Farm stopped selling home insurance policies in California last year, partly because of wildfire risk.)
But when homeowners buy a house, their lives and their wealth get locked into that property for 30 years. “Maybe your kids are going to the school district,” he said. It’s much harder to sell a home when you can’t get it covered. “You have an illiquid asset, and it’s a lot harder to move.”
That means First Street’s wildfire risk data should be taken as “absolute minimum estimate,” Wara said. In a wildfire-prone area, “the real risk is most likely much higher” than its models say.
Over the past several years, runaway wildland fires have killed dozens of people or destroyed tens of thousands of homes in Lahaina, Hawaii; Paradise, California; and Marshall, Colorado.
But in those cases, once the fire began incinerating homes, it ceased to be a wildland fire and became a structure-to-structure fire. The fire began to leap from house to house like a book of matches, condemning entire neighborhoods to burn within minutes.
Modern computer models do an especially poor job of simulating that transition — the moment when a wildland fire becomes an urban conflagration, Wara said. Although it only happens in perhaps 0.5% of the most intense fires, those fires are responsible for destroying the most homes.
But “how that happens and how to prevent that is not well understood yet,” he said. “And if they’re not well understood yet from a scientific perspective, that means it’s not in the [First Street] model.”
Nor do the best university wildfire models have good data on every individual property’s structural-level details — such as what material its walls or roof are made of — that would make it susceptible to fire.
When assessing whether your home faces wildfire risk, its structure is very important. But “you have to know what your neighbor’s houses look like, too, within about a 250-yard radius. So that’s your whole neighborhood,” Wara said. “I don’t think anyone has that data.”
A similar principle goes for thinking about flood risk, Condon said. Your home might not flood, she said, but it also matters whether the roads to your house are still driveable or whether the power lines fail. “It’s not particularly useful to have a flood-resilient home if your whole neighborhood gets washed out,” she said.
Experts agree that the most important interventions to discourage wildfire — or, for that matter, floods — have to happen at the community level. Although few communities are doing prescribed burns or fuel reduction programs right now, some are, Wara said.
But because nobody is collecting data about those programs, national risk models like First Street’s would not factor those programs into an area’s wildfire risk, he said. (In the rare case that a government isclearing fuel or doing a prescribed burn around a town, wildfire risk there might actually be lower than Zillow says, Wara added.)
Going forward, figuring out a property’s climate risk — much like pushing for community-level resilience investment — shouldn’t be left up to individuals, Condon said.
The state of California is investing in a public wildfire catastrophe model so that it can figure out which homes and towns face the highest risk. She said that Fannie Mae and Freddie Mac, the federal entities that buy home mortgages, could invest in their own internal climate-risk assessments to build the public’s capacity to understand climate risk.
“I would advocate for this not to be an every-man-for-himself, every-consumer-has-to-make-a-decision situation,” Condon said.
Where natural gas comes from matters for hydrogen production.
Oil giants Exxon and Chevron are among a group of energy companies that could receive up to $1.2 billion in federal grants to make so-called “clean” hydrogen in Texas. Their proposal to produce the clean-burning fuel using natural gas and carbon capture, in addition to other methods, was selected by the Biden administration a year ago to become one of the country’s seven clean hydrogen hubs. But a trio of researchers at the University of Texas at Austin just showed that there’s a dirty paradox at the heart of the plan.
In a study published in the journal Nature Energy on Monday, the researchers show that upstream emissions in the natural gas supply chain in Texas are so high that it’s essentially impossible to make hydrogen from it that would meet federal standards for “clean” hydrogen. But, the authors warn, the government’s proposed method for measuring the carbon intensity of hydrogen overlooks these emissions. That means these Texas hydrogen projects could get millions in public funding in the name of tackling climate change, all while making the problem worse.
“You’re investing so much in developing a hydrogen economy, and then it turns out, 10 years later, half of them are not even low carbon,” Arvind Ravikumar, an associate professor at the University of Texas at Austin and one of the authors of the new paper, told me. “I think that’s a real risk.”
This story might sound familiar. I’ve written extensively about the emissions accounting challenges plaguing another method for making clean hydrogen that requires only water and carbon-free electricity, known as electrolysis. The problem there is that the electric grid still runs largely on fossil fuels, and so plugging in a hydrogen plant will produce indirect emissions, even if the production process itself is clean.
The new study highlights a similar issue with hydrogen made from natural gas. Of course, since this method uses fossil fuels, it’s already substantially more difficult to prove it has any climate benefits at all. In theory, the emissions can be greatly reduced, although likely not entirely eliminated, by capturing the carbon emitted from the plant. The authors show, however, that the more important factor is where the natural gas comes from.
Natural gas is mostly methane, a greenhouse gas more than 80 times more potent than carbon dioxide in the short term, and leaks are notoriously underestimated. But any assessment of the benefits of hydrogen made from methane must take leakage into account, and some natural gas fields are leakier than others.
The paper analyzes a range of scenarios for two hypothetical hydrogen plants — one on the Gulf Coast that sources natural gas from the Permian Basin, and one in Ohio that gets gas from the Marcellus Shale. The Treasury Department’s draft rules for calculating the carbon intensity of hydrogen for the clean hydrogen tax credit say these two plants should assume that a national average of 1% of the natural gas extracted from the ground is leaked into the atmosphere where it warms the planet. But more than a decade of on-the-ground measurements, combined with more recent satellite data, has shown that methane leaks vary widely from well to well and basin to basin.
Using the more accurate, though still approximate, leakage rates of 5.2% in the Permian and 1.25% in the Marcellus, the authors calculated the carbon intensity of hydrogen produced at the two plants under various assumptions. What if the carbon capture system is more effective? Or less effective? What if the capture equipment is powered by renewables? What if we measure the warming effects of methane over 20 years versus over 100 years?
No matter which variable they changed, one result stayed the same: Hydrogen made from Permian Basin gas greatly exceeded the government’s definition of clean hydrogen, i.e. 4 kilograms of CO2 released per kilogram of hydrogen produced. In fact, the emissions from natural gas production in the Permian Basin alone pushed it over that standard. Hydrogen made from Marcellus Shale gas, on the other hand, has the potential to qualify as clean if at least 90% of the carbon at the plant is captured.
The findings suggest that without enormous efforts to reduce those upstream emissions, which come from leaks, venting, and flaring at the wellhead and along the pipeline system, natural gas-based hydrogen projects on the Gulf Coast should not qualify for federal subsidies.
The authors advocate for the Treasury’s final guidelines for calculating the carbon intensity of hydrogen to account for these regional differences. “I think that, to begin with, will make a huge difference in accurately estimating the emissions intensity of these projects,” Ravikumar said. As new methane regulations from the Environmental Protection Agency go into effect, it’s possible that projects that are not eligible today could become eligible in the future. “But the point is, you’ll only know that if you do your carbon accounting accurately across supply chains,” he said.
One problem with this solution is that hydrogen producers have access to another federal tax credit that doesn’t require any analysis of how clean the hydrogen is — up to $85 for every ton of carbon they capture and sequester underground. Indeed, at least one project developer has already said they will go after that subsidy instead of the one for clean hydrogen.
Ravikumar thinks those developers are facing a major risk. “At the end of the day, you’re going to buy hydrogen from these companies explicitly for its low-carbon attributes,” he said. “Right now we did this analysis, but very soon, you’re going to have satellites that are going to look at all these regions and be able to make emissions information publicly available. And once you’re able to do that, you can’t make up numbers on paper.”