8 min read

Ghost writing

I wanted to reflect before making the jump. I'm looking forward to it
Ghost writing

A reminder that today will the last on Substack for OGs and OFZs. My reasoning and what to expect for pricing and paywalling going forward are broken down here. I’ll begin the move to Ghost at week’s end and will aim to be up and running again around August 16 after a much needed honeymoon in Chicago. If you want to get your first 3 months’ subscription discounted at Ghost, subscribe in the next few days for the monthly plan or else the annual plan, which will rollover whenever it’s renewed — I’m still working out the logistics for how those rollovers work but will provide all of the relevant promo codes, probably via Substack or else personal email (reach me at nbtrickett@gmail.com) before launching on Ghost.

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Crisis? What crisis?

I started out today thinking I’d do the usual roundup, but realized I wanted to breathe a bit and reflect instead. It’s been somewhere around 205-210 days excluding weekends and public holidays since I launched this newsletter. I’ve taken some time off around Christmas and in May into early June so let’s call it 185sh days OGs and OFZs has gone out. At an average length of about 3,000 words, that’s about 555,000 words of headline chasing, summary, and analysis. That is quite mad. While I’d already had the delusions to start working on a potential book as a means of keeping myself during the months I thought I couldn’t legally work due to the complications of the visa application process, by no means was what I had in mind set in stone. My overall goal initially was to push back on the idea that Russia was a resurgent power by linking its domestic political economy to the evolution of its foreign policy, but that was also a direct reaction to having lived in Washington D.C. during the worst of the moral panic about Russia and seeing just how twisted the analysis of Russia, Eurasia, and the myriad complexities of power politics had become. Declinism has a history stretching back to the 70s and while I agree that China’s rise is qualitatively different, it is striking that even the best historical minds on this stuff tend to buy into the hype of Russia’s challenge to American power on top of China. I originally wanted to go back to 1985 and think big picture about oil, monetary politics, all of it before deciding far too late that 1998 was a much better jumping off point and the 98’ financial crisis a much better framing device. I also didn’t yet understand how COVID and climate could go so well hand in hand shredding the shibboleths and recycled thinking of both the transatlantic policy firmament separating us mere proles from the movers and shakers and the academic and business commentariat engaged in sorting the basics of what the hell is actually going on. Talking about climate as a national security, foreign policy, or economic issue isn’t new. Somehow our political leaders have proven incapable at finding half-decent language to communicate the connections between all three, ceding the messaging to evangelists who have the right aims but rarely the political nous or nuance to fashion acceptable compromises or move things much further than outside of urban strongholds. I’m speaking mostly of the United States here, though even in the UK with an otherwise terrible ruling party decent on climate issues, their plans are pathetically lacking in scope and ambition.

I was never a big supporter of the Green New Deal as it was framed during the 2019-2020 Democratic primary season in the US for a lot of reasons. Estimations about new jobs created are wildly inaccurate and optimistic in most cases, outright bans on oil & gas extraction just lead to huge price surges for the working poor, lost jobs, and more difficulty managing base load capacity, and the most ardent proponents of green ‘developmental states’ seem stunningly disinterested in domestic politics of resource extraction among resource exporters. That’s not to say I disagree with massive spending bills and budgets in the US and Europe to massively increase investment into greening infrastructure, improving heating and power efficiency in homes and buildings, trying to increase density in and around cities, and overhauling power grids.  But rather that the political approaches taken have always been lacking, and in the US specifically, the failure to exploit Big Oil’s open acceptance of a carbon price as a rhetorical tool to neutralize other regulations was disastrous. Had reformers taken them at their word with an initial $30-40 a ton price and bracket it into some sort of cap system around 2016, the conversation today would probably be in a different place. As a member of the Young Fabians and the Executive Committee for the Economics and Finance Network, I push the line about green jobs in the UK not out of a staunch belief all those jobs materialize, but as a means of changing the window for fiscal policy in general. Tracking Russia and Eurasia over the last 9-10 months have significantly strengthened my belief that domestic economic structures, policy choices, and trends can achieve far more than demonstrative geopoliticking to counter states like Russia and rebuild industrial capacities otherwise handed to China. Climate justice feels good but fosters the false belief that there is a perfect energy transition in which the fossil fuel complex and nuclear industry don’t play large roles. It also is a useless narrative when the demand it creates exacerbates resource conflicts or strengthens autocratic regimes elsewhere depending on the distribution of key natural resources since they’re fixed assets.

A particularly good essay Tweeted out by Adam Tooze written by Lance Taylor for New Economic Thinking illustrates the pitfalls of the approach to energy transition you internalize when you work in the energy sector as a consultant. To put it as simply as possible, roughly two-thirds of the energy generated in the American economy is “rejected” i.e. goes unused or lost as a result of the laws of thermodynamics and inefficiency, thereby creating welfare mismatches between the intended effects of something like a carbon price and its actual effect on net emissions. Since electric vehicles still use electricity, for instance, they can achieve over 10% emissions reductions but that’s far from enough to significantly achieve 2050 net zero targets. The economy broken up by “quads” (quadrillion British Thermal Units) in terms of energy consumption is a great graphic from the piece to capture the problem:

Taxing carbon, no matter how much you raise and redistribute, can affect the the quantity of emissions from any given power source but not the level of waste built into our energy systems. The effect on consumption may therefore be decently significant at the household or consumer level, but not in relation to the amount of emissions created by energy systems relative to unused energy. This is a global problem. Google a bit and you’ll see it regularly appear that the world actually wastes more energy than it consumes. We can’t realize 100% utilization no matter what we do. What we can do, however, is to minimize waste by capturing as much of the energy lost as possible — usually heat — and reusing it somehow. That doesn’t work for a car engine, even if it’s an electric vehicle, but it’s vital for power generation and heating. Finding ways of capturing some of the heat generated and releasing it into, say, district heating at a lower but still warm temperature is probably the most obvious example. There’s also the expansion of combined cycle plants using both steam and gas turbines together to increase the efficiency of total power generated. Fixing the emissions problem is ultimately going to be about making massive energy efficiency gains, including through the promotion of greater residential density and public transit. But you can’t square these objectives with a global approach without some mechanism to price carbon to force alignment over time and spur private investment into efficiency gains alongside regulatory changes and state investment. Ask someone in the industry and while you’ll get some of this or that about limiting methane emissions, carbon capture, tech deployment for extraction, and so on, the magic bullet is carbon pricing because that’s easiest to provide research products for. You can model the financial effect of a carbon tax or similar instrument on internal rates of return for project far more easily than estimating regulatory impacts from rules that mandate insanely high energy efficiency targets by 2030. Fewer assumptions have to be made. The result is a patchwork set of solutions that improve things, just not with the systematic intensity needed and implicitly and explicitly built around the provision of ‘green assets’ for investors or ‘greening’ private investment.

I’ve avoided the language of New Deal and WWII mobilization coded into climate change politics from the Left here because my experience in consulting, even if limited, also taught me that we tend to significantly underestimate the pace of technical change even amid slack economic conditions. Batteries aren’t going to save all of us by themselves, but their costs have declined far faster than projections back in 2010 assumed:

It’s trends like this that make me more bullish on the potentially positive effects of what otherwise looks like paltry climate action. US Democrats’ laser focus on social programs is an electoral gambit as much as a reflection of party priorities. It plays better for the midterms to have programs out the door that are funded immediately and up and running. Infrastructure takes years to see and, setting aside Congressional dysfunction, is probably likelier to be doled out in chunks even with a potentially large set of bills this year. Granting more fiscal and monetary power to local authorities to invest in the infrastructure needed to help sustain innovation, demand, and raise residential density is as important as any federal line item. And these otherwise distant fights are where much of the contours of great power competition are being drawn. Want to bring semiconductors back to the US and Europe? Build more infrastructure to sustain demand for goods and inputs that need them while using carbon-based trade mechanisms to speed up domestic regulatory alignments. Want to weaken Russia’s ability to leverage its energy wealth (even if the energy weapon is more narrative invention than hardbound fact)? Then build more nuclear, dig deep into efficiency gains, deploy more batteries, and drive electric cars. Want to handle increasingly common supply chain shocks and local crises due to extreme weather? Build more resilience and expect interest rates and insurance costs to get crazy. Climate politics are about security, stability, and power in most senses of each term. I’m not gunning to write a magnum opus on that topic, at least not yet, but this year has made it impossible to construct a full account of the last 50 years of power politics without linking the various choices made and not made on climate issues together nor can one propose a future “grand strategy” without centering the ripple effects of climactic shock. Pricing carbon and redistributing the proceeds to those most negatively affected is a necessary, but not sufficient condition to achieve the kinds of transformation needed. And it’s for that reason that the need to find ways to articulate the position of carbon autocracies in a world where renewed ‘democratic action’ on climate is becoming more urgent each day. I’m looking forward to bringing more of these disciplinary problems and approaches into dialogue in the months ahead. Russia and Eurasia are in serious trouble and we do enough sleepwalking as it is into crisis after crisis. Hopefully you’ll stick around to see what comes of the exercise.

Like what you read? Pass it around to your friends! If anyone you know is a student or professor and is interested, hit me up at @ntrickett16 on Twitter or email me at nbtrickett@gmail.com and I’ll forward a link for an academic discount (edu accounts only!).

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