The moral case for fossil fuels

Update: My speaking notes from the Wheeler Centre talk (may contain typos etc.)

‘Coal-fired power will soon be obsolete’.

Sinclair Davidson

Dealing with climate change isn’t simply a scientific question that can be answered by scientists. Rather it is an economic, moral, political, and technological question too.

I am not going to concentrate on the scientific and technological issues so much as the economic and moral questions.

It is certainly the case that coal-fired power will not be technologically obsolete in the near future. Absent disruptive or Schumpeterian innovation in power generation – like nuclear fusion – coal-fired power will be with us for a long time.

The question is whether coal-fired power will be morally obsolete.

That is where morality and economics plays a role.

Economics is about trade-offs – how much of this do we have to give up to get that. We trade-off costs and benefits. When talking about fossil fuel consumption we hear a lot about costs – and it is true, the social costs of carbon are greater than zero. That, however, is not enough to argue that fossil fuel consumption is a ‘bad thing’.

The mere existence of social costs is not enough to argue that coal-fired power imposes externalities. Rather we must demonstrate that coal-fired power has greater social costs than social benefits in equilibrium.

That is a difficult challenge where the proponents of the motion will fail to convince.

According to the International Energy Agency some 68% of world electricity is generated by fossil fuel. The single largest source of fuel is coal – some 40% of world electricity is coal-fired power.

The material benefits of our modern civilisation are built on cheap and reliable energy and in practice that means coal.

To be sure, the proponents may wish to argue that our material benefits are ‘unsustainable’. But that immoral choice involves them having to nominate those people who will be denied the benefits of our modern civilisation.

  • Those people who will not receive the benefits of modern medicine.
  • Those people who will not receive the benefits of labour saving devices.
  • Those people who will not enjoy the comforts and longevity that access to cheap and reliable energy provides.

As it is we live in a world where too many people are already excluded from the good life – the proponents want there to be more of them.

We know what a power-deprived world looks like – that is the world before the invention of the steam engine. A world where human and animal muscle powered our civilisation. That world was made possible by the invention of the whip.

So-called renewable energy existed in that world. Wind power and hydro. Yet immediately before the industrial revolution in England those sources of power added a negligible quantum of power to total energy usage.

Why? Because it is diffuse and unreliable.

That remains the case today. Environmentalists oppose the building of dams. The wind doesn’t blow all the time, and the sun doesn’t shine all the time.

William Jevons – one of the fathers of neo-classical economics made the point in 1865:

With coal almost any feat is possible or easy; without it we are thrown back into the laborious poverty of earlier times.

That remains true today as it did then.

  • Who here will give up modern medical technology if we give up coal?
  • Who here wants to return to a life expectancy of 36 years?
  • Who here actually wants to live by the sweat of their brow?

Without access to energy-dense, abundant, versatile, reliable, and affordable coal everyone in this room will get that opportunity.

  • Who here thinks the whip to be a greater invention than the steam engine?

Yes – coal power imposes costs of society, but the benefits far outweigh those costs.

A clean environment is a superior good – as our incomes rise so demand for a cleaner environment rises. That is why in western countries we have seen increased use of fossil fuels and coal over the last 100 years and a cleaner environment. 19th century England was just as polluted as modern China.

Those who argue against coal-powered electricity are engaged in what Harold Demsetz has labelled nirvana economics. They make three assumptions:

  • People can be different.
  • There are free lunches.
  • The grass will greener on the other side.

People do not want to give up their current standards of living. People who do not share our current standard of living aspire to it. Proposed alternatives to coal-powered electricity usually constitute a free lunch. Except gas – the biggest competitor to coal is gas, especially fracking in the United States.

The proponents want us to believe in a finite world – yet the most valuable resource we have is infinite. Human ingenuity – combined with cheap, abundant and reliable energy from fossil fuels and coal – has enabled us to lift our living standards above that of animals. There is no reason to believe that human ingenuity won’t work to ensure a viable and prosperous future.

The proponents want us to believe that we are imposing huge costs on future generations. That is an open question – we cannot know what future generations will experience. We do know, however, that the proponent’s solution will deprive current generations of the very same high standard of living we enjoy.

By depriving people of access to cheap reliable and abundant energy we are not just imposing our preferences on those people, we are imposing poverty on those people.

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19 Responses to The moral case for fossil fuels

  1. blogstrop

    Fossil fuels – Fuck, yeah!

  2. Leigh Lowe

    Coal is good.
    Burn shitloads while we still can.

  3. Bruce of Newcastle

    The moral case for fossil fuels is there is no moral case for large scale renewables, which are bird and bat chomping/frying monstrosities. The only moral technologies which can be built widely are fossil fuel and nuclear.

    If the Greens were sane they would at least advocate CO2-free nuclear energy. Because they do not its absolutely apparent that they are religious nutters.

  4. Rafe

    Tell that to the EPA in the USA. The piece is mostly about ozone regulations but the same applies to CO2.

    Virtually every EPA announcement of new regulations asserts that they will improve human health. Draconian carbon dioxide standards, for example, won’t just prevent climate change, even if rapidly developing countries continue emitting vast volumes of this plant-fertilizing gas. The rules will somehow reduce the spread of ticks and Lyme disease, and protect “our most vulnerable citizens.” It’s hogwash.

    But Americans naturally worry about pollution harming children and the poor. That makes it easy for EPA to promulgate regulations based on false assumptions and linkages, black-box computer models, secretive collusion with activist groups, outright deception, and supposedly “scientific” reports whose shady data and methodologies the agency refuses to share with industries, citizens or even Congress.

  5. Baa Humbug

    Moral schmoral. The fact remains that nobody but nobody knows what our energy use will be in 100 years time.
    Nobody in 1900 knew what energy use would be like in 2000. Nobody in 1800 knew how to solve the problem of horse shit piling up in the streets bringing flies and disease. Technology fixed that.

    The fossil fuels in the ground that we know of is enough to last us at least 200-300 years. Yet we may not need a single pound or litre of the stuff in 2114. All those assets rendered worthless like the many horse carts and stock whips etc.
    Dig it up, use it, sell it and get something for it while it’s worth something TODAY. Use it to raise millions out of poverty, use it to extend the lives of millions of people by many years instead of leaving it in the ground presumably to save the planet for the unborn children of my unborn great grand kids.

  6. JC

    The moral case for fossil fuels

    It’s even shocking that the case needs to be made.

  7. Peter from SA

    yet the most valuable resource we have is infinite. Human ingenuity

    very elegant point Sinc. This is at the heart of it.

  8. Infidel Tiger

    yet the most valuable resource we have is infinite. Human ingenuity

    I’m starting to wonder about that.

  9. incoherent rambler

    By depriving people of access to cheap reliable and abundant energy we are not just imposing our preferences on those people, we are imposing poverty on those people.

    Thank you Sinclair.
    Cheap energy is wealth.

  10. Baa Humbug

    Assuming the environuts are successful in getting the world to move away from coal, all they will achieve is to drive down the price of coal making it even more competitive against other energy sources.
    By the time the Chinese decide to look at their emissions beyond 2030, they could be looking at abundunt long term sources of cheap coal to fuel the hundreds of power stations they’ll require.

  11. There is no reason to believe that human ingenuity won’t work to ensure a viable and prosperous future.

    Not after Clive H. suspends democracy and Doris Bagshawe is finally running the show.

  12. Rabz

    that immoral choice involves them having to nominate those people who will be denied the benefits of our modern civilisation.

    – Those people who will not receive the benefits of modern medicine.
    – Those people who will not receive the benefits of labour saving devices.
    – Those people who will not enjoy the comforts and longevity that access to cheap and reliable energy provides.

    Every time you hear some sanctimonious moralising first world twat harping on about unsustainability, etc, ask them why they hate third world peoples and wish to keep them in poverty.

    P.S. Great effort, Sinc.

  13. RMR

    A point well made Sinc. We must learn to take back the moral high ground while making clear the trade-offs that have to be made.

  14. Leo G

    Tell that to the EPA in the USA. The piece is mostly about ozone regulations but the same applies to CO2.

    Tell it to the state EPAs in Australia. Here they are primarily interested in maintaining the revenue from pollution licences. The public are fed a sop of meaningless pollution indices.

  15. ricardo

    Please stop using the term “Fossil Fuels”. It was invented long ago to give the impression that oil is some sort of finite resource, and we would be running out any day now. Hence peak oil etc.

    Hydrocarbons are just a natural part of the earth. Oil is formed by pressure from the earth’s magma on simple molecules like methane. It then finds it’s way into the earth’s crust. The Deepwater Horizon well is over 10km deep. How on earth did dead dinosaurs and forests get down there? Titan the moon of Jupiter has seas of methane, did dinosaurs create that too?

    I know the term hydrocarbons might confuse idiot greeny minds, and draw blank looks, but calling them “fossil fuels” just falls into their hands. Piss them off and call it what it is.

    Just google “abiotic oil” to learn more.

  16. Gilas

    Every one of the five speakers except one agreed that global warming and greenhouse gases was the greatest issue of our time.

    What’s the point of the debate then? Sinc’s side lost before they started.

    Global warming and greenhouse gases are the greatest manufactured non-issue of our time. Just like drowning polar bears and sinking islands in the Pacific.

    The main, massive and irrefutable problem with conservatives is that they believe they can reason with idealogues or fanatics; just discuss calmly with your opponents and they’ll see the light, right?

    Wrong.

    The “march through the institutions” didn’t happen through reason.

    It’s time conservatives learnt that.

  17. Clinton

    I’d have started my segment of the ‘nay’ debate by asking that 88% of the lights be turned off and the sound turned down by a similar amount (fossil fuel % used for electricity generation).
    Then in (necessarily) raised voice remove a further 6% as environmentalists will not allow the building of dams for hydro.
    Then as it is late and the sun will have set turn the rest off as solar power will not be working, turn on 2 torches and shout at the audience.

    Enjoy the green utopian society!

  18. Frodo

    These “debates” are always about absolutes. Which is why a debate about energy ends up collapsing into moral bickering.
    It is plain that coal is not going to have the share of supply that it has had. A large share of capacity coming on now is renewable. This is happening because quite a few countries are worried about the import dependency (Europeans vis a vis Russia, China vis a vis ocean freight routes, etc). Others are wanting to reduce health impacts of sulphur and ash (China, etc). Some have a cheap gas option (US, Myanmar, maybe Indonesia).
    Australia has discovered what happens when your coal costs and transmission costs collide: price inflation is belting demand and now we appear to have cost inflation on a bit of a runaway.
    What we know is that banks don’t want to finance Australia’s next coal port and next coal basin because the coal price is probably coming off further and will probably hold there for a long time – as it did last time we went nuts on capacity (late 1970s).
    Fundamentally, seaborne coal is not cheap. And even here in Australia, where generators are co-located with mines, it’s proving to be too expensive to attract industry.

  19. Ellen of Tasmania

    Tom Woods Show:

    The Moral Case for Fossil Fuels – November 13, 2014
    Alex Epstein of the Center for Industrial Progress discusses his new book, The Moral Case for Fossil Fuels.

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