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Tuesday, 8 July 2014

Economics and Ecology - Differing points of view ...

A recent article in the Wall Street Journal entitled “The World’s Resources aren’t Running Out” made very interesting reading. The author, Matt Ridley, is a journalist with a background in economics, and takes a look at a number of statements made by ecologists and scientists on the “Global Warming/Human is using up the planet’s resources” side of the argument. As he points out, most people would agree that humans are having an impact, particularly where there is overpopulation, but the impact is not quite what so many claim.

Where advocacy groups such as the World Wildlife Fund, Greenpeace and Friends of the Earth promote to the idea that we will shortly run out of coal, oil, iron ore, etc., etc., an economist will point to the fact that using something does not mean it is ‘gone’ for good. Much of what is supposedly being ‘used up’ is simply taking a new form and can be recovered, reused, and reworked again and again. Many advocacy groups fail to grasp the difference between ‘estimated reserves’ of something and the likelihood that new ‘reserves’ are being mapped out almost daily. They also fail to take into account the recycling of these resources. Plastics are a good example, most are best described as ‘solidified hydrocarbon’ and that can be recycled to recover at least some of it. Nor is this the only area where simple economics takes a more optimistic view.

Since the rise of the ‘Green’ movements began we have been bombarded by dire predictions of agricultural collapse, warnings of ‘Peak Oil’, vanishing fresh water supplies and many more ‘tipping’ points that will wipe out our populations, our technology or our societies. Economists find this extremely frustrating, since again and a again such ‘tipping points’ have come and gone with no check at all on progress - largely because of innovations such as fertilisers, improved seeds for crops, insecticides, new technology for finding oil, gas and simultaneously reducing individual consumption through more efficient engines. Ironically, the very people who campaign so vigorously to ‘save the ecology/climate/planet’ also vigorously resist these advances. 

Mr Ridley acknowledges that he once (like most of us I suspect) carried the ‘ecology’ torch, believing in the ‘finite’ model and that growth must be restricted and limited. Since then, again like most of us, he has come to recognise that with growth comes innovation. Of necessity, we learn to do more with less. Efficiency is achieved through improved technology. Using the example of coal power stations - anathema to most ‘Greens’ - if we accept that new technology means that the waste gas in the chimney can be ‘scrubbed’ to extract that evil carbon dioxide and sulphur dioxide (actually the process is quite simple and clever and is in use at most such plants now) which can then be recycled and either ‘stored’ or turned into something else, the plant is, according to Greenpeace, still only 47% efficient. They arrive at that number by measuring the heat ‘lost’ up the smoke stack and through the condensing process which returns the steam to water for the boilers, but it is far from an accurate number in reality. 

In many dry countries that ‘waste heat’ is used to distill water from sea water. This is how many of the cities in the Persian Gulf provide drinking water for their citizenry. It is how water can be, and is, provided for agriculture in some drought prone countries as well - but is never taken account of by the ‘ecologist’ camp. There are other innovations for producing fresh clean drinking water as well, one such coming from the maritime industry. Called a ‘Hydropore’ system, it uses micro filters to remove the salts and other particles from sea water to produce vast amounts of fresh drinking water - most of it cleaner and purer than what we drink in most European towns and cities. Such plants can operate on land as well, producing fresh water for towns or agriculture. As an example of the output, one of the USN’s Nuclear aircraft carriers can produce enough electricity for a medium sized city, and enough fresh water through their hydropower systems to water it as well.

While on the subject of ships, another recent Greenpeace campaign charged that these were the ‘biggest polluters’ of the oceans and the atmosphere and demanded a surcharge on fuel for them. This on the grounds that a single ship pumps out ‘tons’ of CO2 and other pollutants on its travels. It ignores, of course, the fact that such ships enable us to feed the world’s population by moving food from a producer with a surplus, to a consumer with a deficit, but there, that is part of the problem here. It also ignores the fact that the ‘waste gases’ from the engine pass through an ‘exhaust gas economiser’ which transfers heat to the ship’s hot water systems and preheats water for any boilers. Yes, such ships also consumes fuel at a rate of ‘Tons per Hour’ but we must also recognise that an average container ship shifts thousands of tons of produce very efficiently, far more efficiently than could be done by camels, trains or trucks. And the fuel consumption when under way is around one third of what used to be consumed by a transatlantic liner such as the France or the old Queen Elizabeth which burned around 40 tons of oil per hour at cruising speeds. Once again, more efficient machinery, means greater economy of operation, less consumption to achieve more.

Aircraft engines are going through a similar revolution/evolution. Not only are they now much more efficient, they are becoming quieter and less fuel hungry. 

Then there is the question of ‘resources’ such as iron ore, copper, manganese, chromite and many more. Extracting these from the ground is very ecologically damaging, and as the mines get deeper, more difficult, it is obvious that more efficient and less damaging means of recovering it need to be examined. And they have been. Open cast mines in operation are pretty ugly, but it is now common practice to ‘landscape’ such sites, often using them to store landfill - the rubbish generated in cities - and even restoring them to nature. Recycling is becoming much more efficient as well. Metals thrown into to rubbish are being recycled at a far greater rate than ever before. Electronic components are recovered, and reprocessed to extract the metals they contain in order to make new components. I read recently that ‘new’ appliances contain around 40% of metals recovered from old appliances thrown away, so you new iPhone/Android/Samsung probably has metal in it that cam from a reel to reel tape recorder!

Economists tell us that innovation is driven by growth and demand. If something is in short supply, two things happen, the price rises and new sources are found, and people find ways to use less more efficiently or reuse what is already available. This is the key thing most ‘Green’ advocates seem to miss. I still have reservations about the potential for unlimited growth (unless we can find ways to start to colonise planets in outer space), but I don’t think we are yet in danger of ‘running out’ of anything vital - as long as the legions of ‘Green’ campaigners can be persuaded to stop obstructing innovation and development of technologies that can and do meet the rising demand. 

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