Assignment 5 Midterm #2 Study Guide Notes

.pdf
School
University of California, Berkeley **We aren't endorsed by this school
Course
ESPM C10
Subject
Economics
Date
Oct 26, 2023
Pages
6
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Energy and Humans Energy is an essential component of human life, as it underlies the complexity of human society. This study guide covers several topics related to energy and humans, including the history of fire on Earth, the effects of cooking on human evolution, and the impact of the oil economy on society. History of Fire on Earth: Fire likely originated about 500 million years ago after life filled the atmosphere with oxygen and created biomass on dry land. Human ancestors likely harnessed fire over a million years ago and shifted from opportunistic use to actively maintaining and creating fire. Fire has been used as a management tool for ecosystems, creating habitat for hunting, clearing pests, aiding travel, regenerating desired plants, and for defense. The suppression of fire has resulted in an infrequent, large fire cycle in some ecosystems, like California. Effects of Cooking on Human Evolution: Cooking allowed humans to decrease physical effort and time needed to chew food, get more nutrition from food, and possibly facilitated the support of larger brains. Due to the larger brains, humans give birth to "premature" babies, which require resources to support long development. Fire may have allowed humans to tell stories and create myths. Oil Economy Energy and climate are integrated issues, with most energy use emitting greenhouse gases. The oil economy has significant impacts on society, including economic market failure and global commons issues. The USA is the largest producer of oil and is now becoming an oil exporter. Energy poverty is a significant burden for about one billion people, particularly for women who are disproportionately affected.
Externalities of Oil I. Cost of Military The USA spends approximately $85 billion per year to protect global oil supplies in the Persian Gulf. The cost of military protection for each barrel of oil is estimated to be between $11 and $30. This does not include the costs of the Persian Gulf War and the Iraq War, which amounted to over a trillion dollars. The US military is the largest institutional user of oil in the world, and the supply of oil on the battlefield is a major logistical impediment. Waste and pollution from defense activities can result in soldier health issues, which may cost up to $400 billion. II. Government subsidies The government provides annual tax breaks worth $120 billion for the oil industry. Low lease and royalty rates are also provided. The Department of Energy provides direct research and development support. The government supports international oil production, providing $13 billion over a 5-year period. III. Inequities Nigeria is a case study of the negative effects of oil. The country has experienced increased poverty, theft, corruption, and environmental degradation due to oil production. IV. Climate CO2 in ice cores from Antarctica and Greenland provide nearly 600,000 years of continuous climate and atmospheric records. Ocean sediments provide millions of years more to the record. Present CO2 levels are approaching levels not seen in about 3 million years, and previous spikes in CO2 (and temperature) have caused mass extinctions. Foraminifera shells (and their O isotopes) provide records of the ocean temperatures.
Global circulation models (GCMs) are used to explore how the world's climate system responds to changes such as greenhouse gas concentrations. A significant result of GCMs is that there is no explanation for increases in global temperature over the last 50 years other than greenhouse gases. V. Putting a price on climate change Economists value money now more than in the future, which is called the "discount rate." This is based on the assumption that the future will be more wealthy than today and can better afford any change. The recent Trump administration had a discount rate on carbon emissions of 7%, which means they were only concerned about the next decade and had a negligible price on carbon emissions. A solid estimate of the cost of emissions on society can help to tip the economic balance toward alternative energy sources. A recent study by economists places the cost of emitting one ton of CO2 at $185 and a roughly 1.5% discount rate. Since a ton is produced by 112 gallons of gasoline, this is equivalent to adding slightly more than a dollar to each gallon of gas. Estimating the cost of emissions requires understanding many climate impacts in the near future. Paths to Non-C Energy Overview: Our energy use is divided into sectors: Electricity, Industry, Transportation, Buildings/residential, Agriculture. Decarbonizing each sector has its own unique challenges. "Net Zero" means that the sum of CO2 sources and sinks is equal to zero. Electricity: Easiest sector to decarbonize, but not a sure thing. Electrical demand will increase significantly due to emerging countries and switch to electricity for various activities.
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