tidbits #16

  • Fake meat solution: Many people changed to a vegetarian diet simply for moral reasons, or because they understood that there are serious health impacts from regular meat consumption. For example, it is now widely-accepted that eating meat every day is roughly as dangerous for you as smoking a pack of cigarettes every day. Thus, if you are a health-conscious person, or if you rank the welfare of animals sufficiently highly, yet at the same time if you enjoy a tasty burger, then fake meat may be just the alternative that you were searching for!
  • Investors fear the upcoming decommissioning of nuclear plants in Germany:  Estimates for decommissioning of German nuclear power plants ranges from 30-70 billion euros. In contrast, the provisions for dismanteling made by Germany’s nuclear utilities are 39 billion euros, certainly at the lower end of the cost spectrum. Given that costs in the nuclear industry tends to be underestimated by a factor of 1.5 to 2, we can imagine that the final costs will be even higher. As a result, investors are selling their shares from German nuclear utilities. I attach below the share prices for E.ON and RWE in Germany. As you can see, their shares prices have significantly dropped during the past two years.
  • World can be 100% renewable energy at no/little extra costs: Zachary Boren has done a good summary of the latest Greenpeace Energy (R)evolution Scenario. The bottom line is that, according to estimates by Greenpeace, the world can completely phase out BOTH non-renewables AND nuclear by 2050 at no extra costs. Has anyone deeply analyzed the assumptions of Greenpeace? It seems a bit optimistic, I mean the zero extra costs result. But hey – in effect – even at some extra cost should this be an interesting option. I mean, from our integrated assessment climate change models, basically bigger economic growth models with a climate change feedback, we economists generally find that it is optimal to continue to rely on fossil fuels for quite some while at to accept some degree of warming. But it is also clear from these models and subsequent sensitivity analyses that the more additional realistic feedbacks and information we add, like uncertainty, like health costs from fossil fuel use, potential for technical change in the renewable sector, etc, the earlier will we want to switch to renewables and phase out non-renewables. I think while we economists focus too much on the optimal policy given our limited models, we may also want to consider that small economic costs of completely phasing out nuclear and non-renewables may be strongly outweighed by a world without human-induced climate change and fewer worries about nuclear accidents.

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