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COP-21, World Renewable Energy, and World Trade
This article describes eight major topics regarding the adequacy of COP-21 requirements: a survey of historic temperatures of the past 420,000 years; the status of the world renewable energy; the impact of COP-21 CO2 emission reduction measures on the US economy; and the US leaving COP-21.
– The Future impact of COP-21 on World temperatures in 2100
– Historic Temperatures of the past 420,000 years indicate 4 major cycles of temperature and CO2 in the atmosphere.
– The world is moving very slowly towards renewable energy during the past 10 years. A cost estimate of the investments required for the world to have 90% of all of its primary energy from renewables by 2050 or 2100.
– Summary of world CO2eq emissions, all sources
– Summary of world CO2eq emissions, energy-related
– Energy efficiency is better for CO2 emission reduction than wind and solar capacity build-outs.
– The future impact of reducing CO2 emissions on US international competitiveness.
– The US leaving COP-21
FUTURE IMPACT OF COP-21 ON WORLD TEMPERATURES IN 2100
Paris Conference of the Parties, COP-21 in 2015: COP-21 is a non-binding, CO2 emission reduction agreement, which aims to limit the world temperature to 2 degrees Celsius above the pre-industrial level during the 1861 – 1880 period by 2100. By 2015, the increase was about 1.0 C. That leaves just 1.0 C to go. This may appear minor, but is not.
The world CO2eq emissions, all sources, were about 52.7 billion metric ton in 2014 and are on a trajectory to become about 65 billion Mt by 2030. However, the UN Environment Program, UNEP, estimates the emissions would be about 60 billion Mt by 2030, if all current policies and pledges, made prior to COP-21, were fully implemented. If so, the world temperature increase is estimated to be at least 3.7 C above pre-industrial by 2100. See URLs and below table.
1) With full implementation of COP-21 pledges by 2030, the increase would be at least 3.5 C above pre-industrial by 2100.
2) With additional CO2eq reduction by 2030 (gap no. 1), the increase would be about 2 C above pre-industrial by 2100.
3) With even more CO2eq reduction by 2030 (gap no. 2), the increase would be about 1.5 C above pre-industrial by 2100.
– Item 1 would reduce emissions about 3.5 to 4.0 billion Mt less than in 2016 (the below table shows 4.0). Analyses by MIT; Lomborg, a Danish professor; UNEP; et al., agree on that quantity of emission reduction.
– The emissions reduction would become about 2.5 to 3.0 billion Mt, due to the US withdrawal from COP-21, which means other nations would have to make up the difference, not only regarding emission reduction, but also regarding the anticipated US contribution to the Green Climate Fund of about $25 billion in 2020, and much greater annual amounts thereafter. China and India, major polluters, would not pay a dime.
– The additional reduction of 12 – 14 billion Mt (gap no. 1) required for 2 C above pre-industrial by 2100 is not trivial, as it is equivalent to about 12 times to annual emissions of the entire EU-28 transportation sector.
– The UNEP aims to reduce emissions to ZERO by about 2080, which would require very significant sequestration and other measures. That would be a truly mind-boggling technical challenge and capital investments, especially with 10 to 12 billion people on the planet.
Based on outcomes of twenty prior COPs, starting with Kyoto in 1990, the many trillions of dollars required for additional investments to achieve such a huge emission reductions likely would not take place.
Whereas, China is praised for making investments of at least $100 billion/y, in reality, it is playing catch-up. It has to make those investments, as continuing its severe pollution problems likely would be politically untenable.
India, with similar pollution problems, expects multi-billion dollar annual payments form the Green Climate Fund.
World CO2eq | by 2030 | by 2100 | Chance |
billion Mt | C incr. | % | |
Current Policy Trajectory | 60.0 | 3.7 | |
With COP-21 pledges | 56.0 | 3.5 | |
Gap no. 1 | 14.0 | ||
With COP-21 augmented for 2 C | 42.0 | 2 | 66 |
Gap no. 2 | 3.0 | ||
With COP-21 augmented for 1.5 C | 39.0 | 1.5 | 66 |
% Reduction from CPT, 2 C | 30.0 | ||
% Reduction from CPT, 1.5 C | 35.0 |
Capital Cost Estimate to Implement COP-21: It is always prudent to have some estimates of capital costs to implement any endeavor. The present world investments in RE systems to achieve the Current Policy Trajectory goal of 60 billion Mt is about $300 billion/y, of which China spends about $100 billion/y.
This spending rate likely is grossly inadequate, as the world primary energy of renewables has increased from 19.0% in 2011 to 19.3% in 2015. At that rate, the renewables percent would be too small to achieve 60 billion Mt by 2030. A more proper rate to bend downward the CO2 emission curve (presently on an upward path) would be at least $500 billion/y. See table.
The lower the goal of world temperature increase the greater the rate, $trillion/y, of capital investment. To achieve:
– 56 billion Mt, the investment rate would be at least $1.0 trillion/y during the 2016 – 2030 period.
– 42 billion Mt, the investment rate would be at least $2.5 trillion/y during the 2016 – 2030 period.
– 39 billion Mt, the investment rate would be at least $3.0 trillion/y during the 2016 – 2030 period. See summary table.
RE investments | CO2 goal by 2030 | Temp Incr. by 2100 | Annual | 2016 – 2030 |
billion Mt | C | trillion$/y | trillion$ | |
Current level for 3.7 C | 60 | 3.7 | 0.5 | 7.0 |
COP-21 for 3.5 C | 56 | 3.5 | 1.0 | 14.0 |
COP-21 for 2 C | 42 | 2.0 | 2.5 | 35.0 |
COP-21 for 1.5 C | 39 | 1.5 | 3.0 | 42.0 |
TWO ITEMS OF INTEREST
1) IPCC Climate Models Overestimating Global Warming?: A Guide to Understanding Global Temperature Data explains in detail the IPCC climate models significantly overestimate lower troposphere and surface temperatures by about a factor of 2. See pages 14 and 15 of URL.
2) US COP-21 Pledge: As part of COP-21, the US offered* a pledge to reduce US CO2 emissions 26 to 28 percent below 2005 levels by 2025. The emission reduction would be at a 14% more rapid rate during the 2015 – 2025 period, than during the 2005 – 2015 period, which greatly benefitted from the reduced burning of coal and increased burning of natural gas. See below table with 2025 targets based on data from Page ES-10 of URL.
* Obama did not submit the COP-21 agreement to the US Congress for ratification. Thus, COP-21 is not a US treaty obligation. Many other nations also have not ratified COP-21, including Russia.
More Near-CO2-Free Renewable Systems: In the US, the more rapid CO2 emission decrease would be accomplished by more rapidly displacing low-cost coal, and natural gas, and nuclear with much more costly, mostly wind and solar renewables, which, because of their weather and sun dependent variability and intermittency, would need massive TWh-scale storage systems, and a nationwide HVDC overlay grid (a $500 billion item), and other grid investments, to ensure reliable electricity service remains available throughout the US, Alaska, Hawaii, on a 24/7/365 basis, year after year. See URL regarding storage in Germany
Year | 2005, base year | 2015 | 2025 |
CO2 eq | MMt | MMt | MMt |
Sources – Sinks | 6582.3 | 5827.7 | 4805.1 |
Decrease, % from 2005 | 11.5 | 27.0 | |
Decrease, % from 2015 | 17.5 | ||
Decrease, %/y | 1.45 | 1.65 | |
More rapid CO2 decrease, % | 14.0 |
HISTORIC TEMPERATURES OF THE PAST 420,000 YEARS
During the past 420,000 years, various forces combined to cause 4 major glaciation and thawing cycles. The world temperature was about 2 – 3 C above and about 8 – 9.5 C below, the reference value of the past 10,000 years. The past four cycles indicate, the world, surrounded by outer space at near absolute zero, has a hard time warming up above reference, but a much easier time cooling down below reference, i.e., computer model global warming predictions of 4.3 C above pre-industrial likely are on the high side.
Cycle | High Temp | Temp | Low Temp | Temp | Delta T |
BP | C | BP | C | C | |
1 | 420,000 | +2.0 | 355,000 – 330,000 | -8.0 | 10.0 |
2 | 325,000 | +3.0 | 265,000 – 260,000 | -8.5 | 11.5 |
3 | 240,000 | +2.0 | 180,000 – 140,000 | -9.5 | 11.5 |
4 | 130,000 | +3.0 | 26,500 – 19,000 | -9.5 | 12.5 |
5 | 8,200 | +2.0 | ? | ? | ? |
During each cycle, CO2 in the atmosphere increased from about 180 ppm during the glaciation temperatures to about 280 ppm at the peak temperatures, because of CO2 released by oceans and subsequent biomass growth.
During the most recent cycle, CO2 decreased slightly over a period of thousands of years while temperature rapidly decreased, which indicates the other forces were more influential. See URL
The Most Recent Cycle: The peak temperature of the most recent cycle (the fourth) was about 125,000 years BP, and its maximum glaciation was from 26,500 – 19,000 years BP. The initial temperature decrease was from a peak of +3 C above reference about 130,000 years BP to 7 C below reference about 110,000 years BP, a delta T = 10 C over a period of about 20,000 years, which is not noticeable, on a human scale. The ultimate low temperature was about 9.5 C below reference about 20,000 years BP.
During the glaciation period, sea levels were about 120 meter (470 feet) below present levels. The world’s desert areas, including the Sahara, were much larger than at present. The world population (about 1 – 2 million) during that period (lasting about 7,500 years), likely had a tough time dealing with the cold. A rapid warming trend from 8 C below reference to about 2 C above reference, similar to the prior cycles, started about 18000 years BP and ended about 11,200 years BP. Unlike the prior cycles, this time the temperature did NOT rapidly decrease, but has been lingering for about 11,200 years. See upper left corner of URL
About 15000 – 12000 years BP, most of northern Asia, northern Europe, northern America, etc., were still covered with about one MILE of ice. Almost all of the world’s population (about 1 to 3 million) lived in small groups, mostly in hunter-gathering mode, with some agriculture, in areas of southern France, Spain, Italy, Turkey, the Caucasus, the Middle East, northern Africa, Iraq, Iran, southern India and Asia. North of those areas, with few trees, much frozen tundra and ice, there lived very few people.
By about 5000 years BP, much of the ice had melted, and the world population had increased to about 10 to 15 million people. The big question remains: Why is the temperature lingering for 11,200 years, unlike the prior cycles? Why are we not yet into another ice age?
NOTE: During the past 150 years, CO2 in the atmosphere has increased from about 280 ppm to 400+ ppm, due to various factors, such as a totally unsustainable population explosion (1.0 billion in 1804, 2 billion in 1927, to 7.3 billion in 2015, heading towards 10 billion by 2050), which required deforestation, urbanization, industrial agriculture, and the worldwide production and transport of goods and services, all requiring the use and burning of huge quantities of fossil and bio fuels, which release CO2 and methane, CH4, well beyond the 280 ppm of prior cycles. The world’s ecosystems and its fauna and flora are being irreparably fractured and debilitated by all those manmade activities. World-renowned biologists aver the world should have less than 1 billion people living on a minimal resources diet, and that over half of the world should be set aside/remain undeveloped to enable the other fauna and flora to survive and thrive.
NOTE: Based on a recent study, the temperature gradually increased from the glaciation low point until about 7000 years BP and then gradually decreased until about 1870, after which it increased from -0.4 C to +0.6 C, a delta T = 1 C, concurrent with the increase in CO2 in the atmosphere. The warm part of this cycle started with a world having a lot of biomass, and CO2 in the atmosphere of about 280 ppm, but after about 1870 manmade CO2eq was added to the atmosphere. The temperature increased about 1 C, as CO2eq was added, which has been highly noticeable, on a human scale. According to the graphs in the URL, the 7000-year downward trend in temperature is being interrupted by manmade activities of the past 150 years. See URL.
THE WORLD MAKING ALMOST NO PROGRESS TOWARDS RE
Here is a table of global primary energy consumption percentages (fuels, electricity, etc.) during the 2011 – 2015 period, which, indicates hardly any progress towards RE, despite worldwide investments in renewables of $250 – $300 billion in each of these 5 years. The fossil fuel percentage likely remained about the same in 2016 and 2017.
The total primary energy of wind, solar, bio and geo electricity was only 1.6% in 2015, after about $3 trillion of investments in such renewable energy systems over the past 25 years, and that percentage likely was about 1.8% in 2016, for a growth rate 10.4%/y for the past 5 years.
If that growth rate were extended to 2030, that category would increased from 1.8% in 2016 to 7.2% in 2030, which would have a negligible impact on global temperatures. Google: “REN Renewables 2017” report.
Year | 2011 | 2012 | 2013 | 2014 | 2015 |
Percent | % | % | % | % | % |
Fossil fuels | 78.2 | 78.4 | 78.3 | 78.3 | 78.4 |
Nuclear | 2.8 | 2.6 | 2.6 | 2.5 | 2.3 |
Total renewables | 19.0 | 19.0 | 19.1 | 19.2 | 19.3 |
Modern renewables | 9.7 | 10.0 | 10.1 | 10.3 | 10.2 |
– Biomass, geo, solar heat | 4.1 | 4.2 | 4.1 | 4.2 | 4.2 |
– Hydro electricity | 3.7 | 3.8 | 3.9 | 3.9 | 3.6 |
– Wind, solar, bio, geo electricity | 1.1 | 1.2 | 1.3 | 1.4 | 1.6 |
– Biofuels, such as corn ethanol | 0.8 | 0.8 | 0.8 | 0.8 | 0.8 |
Traditional biomass | 9.3 | 9.0 | 9.0 | 8.9 | 9.1 |
Capital Cost Estimate of Renewables Energy for All: Many people think we can have 90% of ALL primary energy from renewables for 10 billion people and their economies by 2050, or by 2100. Prorating the $33 billion cost of Vermont’s energy transformation* for 10 billion people would be $33 b x 10000/0.625 = $528 trillion, adjusting for per capita income would be 12,380/47,000 x 528 = $139 trillion.
* The Vermont goal is 90% of ALL primary energy from renewables by 2050, not just electrical energy.
NOTE: The gross world product was about $78 trillion, or $78 trillion/6.3 b = $12,380/capita, in 2014. Vermont’s GDP/capita was about $47,000 in 2015.
World Spending on RE is Grossly Inadequate for COP-21 Goals: World spending on renewables was about $300 billion in 2015, of which about $100 billion by China. Some RE people, during and after COP-21, called for RE spending to be increased to $1.0 trillion/y. The numbers indicate the world is under-spending by large factors.
– $139 trillion/34 y = $4.09 trillion/y would be required until 2050; under-spending factor of 13.6
– $139 trillion/84 y = $1.65 trillion/y would be required until 2100; under-spending factor of 5.5
However, significant categories of costs are not included in above estimates, such as having a transformed transportation system and other infrastructures, various transformed industries, healthcare systems, defense systems, education systems, etc., all that to be transformed with renewable energy, which is generally more expensive than traditional energy sources, if storage and grid costs are added and subsidies are taken away.
Huge Nuclear, Wind and Solar Build-Outs Are Needed: At present, Russia, China and India are the main actors in the world’s nuclear sector. All three have major building programs. Japan, the EU and the US have nearly abandoned the nuclear sector.
The transformation of the world’s economies and build-outs of systems for 90% RE will never happen, unless massive nuclear plant capacity, at least 1,000,000 MW, is built by 2050, and that capacity would have to provide much of the world’s electrical energy to replace fossil fuels with syn-fuels and other electrical consumption.
Modern renewables (wind, solar, hydro, bio, etc.) would provide part of the world’s electrical energy. At present modern renewables provide about 10%. See above table.
A future capacity build-out from 2020 to 2050, costing $18.6 trillion, or $620 billion/y, could be as shown in below table.
Source | Existing | Capacity | Life | Generation | Capital cost |
2016 MW | 2050 MW | y | TWh/y | $trillion | |
Nuclear | 392,000 | 1,000,000 | 60 | 7.5 | 5.5 |
Wind, onshore | 474,170 | 1,500,000 | 25 | 4.0 | 3.3 |
Wind, offshore | 12,630 | 500,000 | 25 | 2.0 | 1.8 |
Solar, PV | 303,000 | 2,000,000 | 25 | 3.5 | 8.0 |
Total | 17.0 | 18.6 |
World Electricity Generation: Future electricity generation likely will increase by at least 65% from 2015 to 2050, due to 1) world economic and population growth, 2) continuing energy efficiency, 3) build-outs of heat pumps for heating and cooling of buildings and 4) plug-in electric vehicles and plug-in hybrids, 5) production of syn-fuels. It is clear, the above build-outs of nuclear, wind and solar barely provide just half the projected electricity of 2050.
Year | TWh |
2050 | 40000 |
2015 | 24097 |
2014 | 23894 |
2013 | 23336 |
2012 | 22753 |
NOTE: France generates about 80% of its electricity with nuclear plants, equivalent to about 35% of its primary energy. France has among the lowest electric rates in west Europe.
US Electricity Generation: Total US net electricity generation was 4079.079 TWh in 2016. Wind and solar became 5.55 + 0.90 = 6.45% of electricity generation after subsidizing them for 25 years. Data for 2014, 2015, and 2016 are shown in below table.
Year | Net generation | Renewables | Source | |
TWh | TWh | % | ||
2016 | 4079.079 | 609.087 | 14.93 | EIA |
2015 | 4077.601 | 567.348 | 13.91 | NREL, page 29 |
2014 | 4093.606 | 554.274 | 13.54 | NREL, page 29 |
Net Electricity generation 2016 | % | TWh |
Natural gas | 33.84 | 1380.295 |
Coal | 30.40 | 1240.108 |
Nuclear | 19.74 | 805.327 |
Renewables (total) | 14.93 | 609.087 |
– Hydropower | 6.52 | 265.829 |
– Wind | 5.55 | 226.500 |
– Biomass | 1.55 | 63.288 |
– Solar; PV and CSP | 0.90 | 36.754 |
– Geothermal | 0.41 | 16.716 |
Petroleum | 0.63 | 25.874 |
Other gases | 0.31 | 12.537 |
Other nonrenewable sources | 0.31 | 12.537 |
Pumped storage hydroelectricity | -0.16 | -6.686 |
Total utility-scale | 100.00 | 4079.079 |
Small-scale PV solar | 19.467 | |
Total solar; PV and CSP | 56.221 |
US Electricity Generation in 2050: The present level of subsidies (which will be decreasing in future years), market conditions, etc., draws enough capital for annually adding renewable generation of about 27.373 TWh/y, which is the average annual increase of the past 5 years. Such additions would reach a level of 958.055 TWh/y after 35 years (2015 to 2050), for a total of 567.348 (in 2015) + 958.055 (addition) = 1525.403 TWh from renewables in 2050. See NREL URL
As above mentioned under World Electricity Generation, US net generation is assumed to also increase by about 65% from 4077.601 TWh in 2015 to 6728.042 TWh in 2050. Renewables would become 1525.403/6728.042 = 22.67% of net generation in 2050.
The goal of 90% renewable electricity by 2050 would not be achievable without at least doubling or tripling the subsidies to attract capital to build out wind and solar systems, concurrent with highly visible, nationwide transmissions systems and TWh-scale energy storage systems to cover variability, multi-day wind lulls and seasonality.
The energy cost, $/MWh, of all that would be at least 2 – 3 times more costly than from the existing systems, as proven by Denmark and Germany, which have the highest household rates in Europe.
Coal Particulate Air Pollution: The world’s fossil fuel consumption has been about 78% of all primary energy* for the past 10 years, despite several trillion dollars of investments in renewable electricity systems.
* The energy from wells, mines, forests, etc., is called source energy, which requires exploration, extraction, processing and transport to provide a proper supply of primary energy to power plants, buildings, vehicles, etc.
Current coal consumption is about 8000 million metric ton per year. China and India use about half of that IN AN INEFFICIENT AND DIRTY MANNER; low efficiency plants with high CO2/kWh, and low efficiency pollution control systems with high pollution/kWh.
Modern coal plants in Europe and the US have pollution control systems with efficiencies of 0.995 (about 5 lbs per 1000 lbs of flyash particulates is released to the atmosphere), whereas in China and India the norm is 0.950 or less (at least 50 lbs or more is released to the atmosphere).
SUMMARY OF WORLD CO2eq EMISSIONS, ALL SOURCES
The EPA and IPCC determined the emissions of agriculture, forestry and other land use were 12.648 billion Mt of CO2 eq. in 2014, or about 24% of the world’s manmade CO2 eq. emissions. Biological sources such as cattle, landfills and agriculture account for up to 67 percent of total human-caused methane emissions. See below table and URLs
CO2eq Emissions in 2014 | % | Billion Mt CO2 eq. |
Electricity and Heat | 25 | 13.175 |
Agriculture, Forestry, Other land use | 24 | 12.648 |
Industry | 21 | 11.067 |
Transportation | 14 | 7.378 |
Buildings | 6 | 3.162 |
Other energy | 10 | 5.270 |
World CO2eq in 2014, per UNEP | 100 | 52.700 |
SUMMARY OF WORLD CO2eq EMISSIONS, ENERGY-RELATED
The below table shows, since Kyoto in 1990, the world’s energy-related CO2eq emissions (million metric ton), have been steadily increasing, largely due to increased combustion of coal by China, India and Brazil. During 2014, 2015, and 2016, there has been a reduction in the rate of increase, largely due to the US and China burning less coal. See URL
Year | World | US | |
CO2 MMt | CO2 MMt | Energy-related | |
1990 | 22,292 | 5032 | Kyoto base line |
2002 | 25,668 | 5792 | |
2006 | 30,593 | 5898 | |
2007 | 31,206 | 5989 | |
2008 | 32,208 | 5797 | |
2009 | 31,918 | 5374 | |
2010 | 33,499 | 5571 | |
2011 | 34,876 | 5433 | |
2012 | 35,500 | 5220 | 59% greater than Kyoto |
2013 | 35,867 | 5349 | |
2014 | 36,168 | 5394 | |
2015 | 36,300 | 5248 | |
2016 | 36,400 | 5200 | Estimates |
ENERGY EFFICIENCY BETTER FOR CO2 EMISSION REDUCTION THAN WIND AND SOLAR
It would be much more cost-effective to concentrate on:
– Increasing the energy efficiency of existing buildings.
– Requiring “zero-net-energy”, and “energy-surplus” of all NEW buildings A “zero-net-energy” building would have very low requirements for heating, cooling and electricity. It would be grid-connected, have heat pumps and a PV solar system on its roof to offset the building energy requirements. An “energy-surplus” building would be similar, but the PV solar system capacity would be greater to offset the building energy requirements and enable charging electric vehicles.
– Increasing the mileage of the traditional vehicle population and increase the use of electric vehicles. The CO2 intensity, lb CO2/kWh, of the US grid would need to be significantly reduced by means of increased build-outs of low-CO2 energy sources, such as nuclear, hydro, wind and solar, to ensure source-to-wheel CO2 emissions would be minimal for such vehicles.
These measures would reduce the energy bills of households and businesses, and likely would reduce CO2 emissions by at least 50%, with:
– Minimal government regulations, taxes, fees and surcharges.
– Minimal capital cost.
– Near-zero visual and other adverse impacts.
COP-21, US COMPETITIVENESS AND WORLD TRADE
The big political debate is: should the US stay with the COP-21 agreements to reduce CO2 emissions or not. The real issues are about international trade, bringing manufacturing jobs back to the US and paying for world peacekeeping. The US would be less competitive in world markets if:
– The US invested more in RE, such as expensive offshore wind, which would increase its cost structure.
– The US continues to overinvest in defense to maintain world peace, while others continue underinvesting.
NOTE: The Trade Expansion Act, signed by Kennedy in 1962, significantly reduced US import tariffs, opened US markets to a flood of imports, and led to decades of increasing US trade deficits ever since 1967, the demise of trade unions, and the creation of rustbelt conditions in many parts of the US.
NOTE: Massachusetts has a new energy law requiring utilities to procure electricity generated by 1,600 MW of offshore wind turbines (name plate capacity) by June 30, 2027. The turnkey capital cost of such wind turbine plants, plus wiring to shore, plus onshore grid modifications would be at least $9 billion (not counting financing costs, return on investment, O&M, etc.), and the electricity cost would be at least 25 c/kWh (NE wholesale prices have been a steady 5 c/kWh for the past 5 years). Construction would require huge sea-going tugs, cranes and other specialized vessels to assemble those 600-ft tall wind turbines. Europe has perfected that equipment, but the US does not even have it. Europe offshore capacity is 12,600 MW, US 30 MW. European companies, such as Vestas and DONG of Denmark, Siemens of Germany, and others will be making big profits. Wall Street financiers will collect fees for managing the tax shelters for the multi-millionaire investors. New Englanders get to pay for the outrageously high cost of electricity. Just another way for Europe, Japan and others to hamstring the New England and US economy into a higher cost structures and make them less competitive, all under the false flag of fighting GW and saving the world. Read this article about the Rhode Island wind turbine folly.
Trade Agreements: In the past, US negotiators were out-negotiated by EU and Japanese counterparts. The US felt rich after the WWII and could afford to be generous. Those days are over. In fact, those days were over at least 30 years ago. The US, under Trump, is finally publicly admitting it. As a result treaties need to be renegotiated to level the playing field. Example:
– A Mercedes assembled in Mexico faces no EU import duty, because of a bilateral trade agreement.
– A Mercedes assembled in the US faces the full EU import duty. See URL.
The US worker is being disadvantaged and Mexican worker is being helped. In this manner, the EU is actively undermining the US, and on top of that 5 of 29 NATO nations are not paying 2% of GDP for their OWN defense. Canada is also in on the act.
The Trump administration aims to bring manufacturing jobs back to the US, increase goods exports and reduce trade deficits, primarily with bi-lateral trade agreements, but Europe, Japan and others prefer to apply WTO rules (more to their advantage) and presented uniform opposition during the G-7 meeting of May 2017.
Europe, Japan and others have invested for decades to built up the skills of their technical personnel, the technologies and production facilities to support the most profitable part of the value chain of goods supply (paying good wages, benefits and profit taxes in home countries).
They ship finished products and sub-assembles all over the world, including the US and Mexico, for assembly into end products, such as cars, which is the much less profitable part of the value chain of goods supply (low-skill assembly labor jobs, mediocre benefits, and paying almost no profit taxes in host countries by means of clever transfer pricing). Europe, Japan and others have systematically tilted world trade in their favor and do not want to renegotiate any treaties, i.e., they dug their way to the vault and do not want the Trump Administration to move the vault.
THE US LEAVING COP-21
The four largest CO2eq emitters are shown in the below table. The world CO2eq emissions, all sources, was estimated at about 50 billion Mt in 2012.
– US CO2eq emissions, based on staying with COP-21, would have been about 5.0 billion Mt, but they would be about 6.4 billion Mt, based on leaving COP-21. In the US people live in a spread-out manner, which requires more energy per capita. It would have required several trillion dollars of investments in RE systems and efficiency to achieve the 2030 INDC targets agreed to by Obama.
– China and India would continue to increase their CO2eq emissions. This was agreed to during COP-21 negotiations, because of their low energy per capita. Neither country is making a contribution to the Green Climate Fund, which were scheduled to become quite large for other countries by 2020. See below. China’s energy per capita is at least 2 times that of India, which likely will receive funds from the Green Climate Fund.
– The EU 2030 INDC target would achieve a slight decrease compared to 2030, as planned. In the EU people live close together, which requires less energy per capita. EU transformations likely would require significantly less investments for its 2030 INDC target, than the US would need for its 2030 INDC target. No wonder, Germany, France and Italy immediately declared “no renegotiations” of COP-21, after Trump stated he wanted to renegotiate.
The upshot is, the US would have to make major adjustments to its economy to achieve the overly ambitious INDC targets agreed to by Obama. Trump was absolutely correct to insist on renegotiating the COP-21 agreement.
Share of 2012 CO2eq | Share of 2012 CO2eq | 2030 INDC | 2030, as planned | |
Billion Mt | % | Billion Mt | Billion Mt | |
China | 11.875 | 23.75 | 12.8-14.3 | 12.2-13.7 |
US | 6.050 | 12.10 | 5.0 | 6.4 |
EU | 4.485 | 8.97 | 3.3-3.5 | 3.3-3.9 |
India | 2.865 | 5.73 | 5.2 | 4.5 |
Obama, without permission from the US Congress, committed $3 billion to a Green Climate Fund to literally buy the votes of poor countries, so they would commit to COP-21. Some of these countries are among the most corrupt in the world. Some of that money likely will disappear into Swiss bank accounts, instead of being used for COP-21 goals, as there is NO monitoring mechanism in place. Obama paid $1 billion to the Fund just before Trump was sworn in. Because the US is leaving COP-21, the other $2 billion STAYS IN THE US. See URL for full transcript of COP-21 withdrawal announcement.
Green Climate Fund: A total of 193 countries signed on to COP-21, but that means nothing, unless they agree to do something, to undertake pain. The majority of these countries are underdeveloped and developing countries. They signed on to COP-21 in expectation of payments from the Green Climate Fund. Only a few countries have made financial contributions to the Green Climate Fund. See below URLs
The Fund is administered by the UN. As of 17 May 2017, a total of $10.3 billion had been pledged to the Fund.
– EU member states pledged $4.7 billion (UK $1.2 b; France $1.0 b; Germany $1.0 b; Others $1.5 b)
– US $3.0 billion; already paid $1 billion.
– Rest of World $2.6 billion (Japan $1.5 b; China $0; India $0; Others $1.1 b). See table in URL.
The Fund’s initial goal is to distribute to recipient countries $100 billion in 2020, and much more in EACH YEAR thereafter. The US, about 20% of gross world product, likely would be hit up for $20 billion in 2020, and much more in EACH YEAR thereafter. That Fund likely would become the mother of all boondoggles.
No. Thank you, said Trump. He was not about to let the UN do boondoggle projects with US taxpayer money, especially when considering the insufficient outcomes of almost all prior COP events.
If the world is making so little progress towards RE, then the US, “doing its RE part” by staying with COP-21, would be engaging in an expensive exercise in futility.
The RE movement is primarily driven by Europe, Japan and others, because they have insufficient domestic energy resources. Europe, Japan and others want the US to stay with COP-21, as a big source of cash for future financing of the Green Climate Fund, and because they would become less competitive versus the US, if they increased investments in RE and the US did not.
The US, with chronic budget deficits of about $500 billion/y, already has a huge trade handicap, largely due to overinvesting in defense spending to maintain its world leadership peacekeeping role, and underinvesting in the goods and service sectors. For decades, Europe, Japan and others have underinvested in defense, because of the US protection guarantee; only 5 of 29 NATO nations spend at least 2% of GDP on their own defense.
Country | Defense Spending |
% of GDP | |
US | 3.61 |
Greece | 2.38 |
UK | 2.21 |
Estonia | 2.16 |
Poland | 2.00 |
Europe, Japan and others have been shirking the world peacekeeping burden, as it would divert investments from their goods and services sectors. Instead, they invested in producing and exporting superior goods and services, which the US did not. This causes the US, hamstrung by having to adhere to World Trade Organization rules, to have chronic trade and budget deficits, each about $500 billion/y.
Europe, Japan and others want to keep the good times rolling, i.e., have the US protect them for free, if possible, in hamstrung mode, with chronic trade and budget deficits, WTO rules, and COP-21 requirements.
Photo Credit: Kevin Talec via Flickr
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