New UN climate report: Save us, tech progress!
“On what principle is it that with nothing but improvement behind us, we are to expect nothing but deterioration before us?” - Thomas Babington Macaulay
In This Issue:
The Long Read: 🌡 New UN climate report: Save us, technology!
The Shorter Reads:
💪 What healthier Americans are worth to themselves and to America
🌌 Thinking realistically about asteroid mining
📈 Goldman Sachs on a business investment rebound
💊 The opioid epidemic: When innovation and regulation go bad
The Micro Reads: Anti-build regulation, automation and jobs, brain health, space colonies, and more …
The Long Read
🌡 New UN climate report: Save us, technology!
Much of the reporting on the new UN climate report has focused on the increased confidence of climate scientists that some bad things are going to happen. “Rising seas, melting ice caps and other effects of a warming climate may be irreversible for centuries and are unequivocally driven by greenhouse-gas emissions from human activity,” is how The Wall Street Journal led its piece on the new Intergovernmental Panel on Climate Change analysis. And the WSJ was hardly alone in taking that angle. To the extent the average person is aware of the new report, their takeaway probably revolves around this notion of increased confidence of significant impacts from a warming world.
But the IPCC report isn’t all bad news. First, new research on climate sensitivity led its authors to conclude that some of the most extreme temperature scenarios are less likely. Bloomberg: “The Earth’s response to a theoretical doubling of preindustrial CO₂ levels is now thought to be between 2.5°C to 4°C — a much smaller range than 1.5°C to 4.5°C in previous IPCC reports.”
Second, as I read the report, the IPCC makes it clear that humanity can’t wait for a rise in global environmental consciousness and radical behavioral changes, including a transition to a less-consumerist world powered by sun and wind. Rather, a technologically progressive humanity needs to hack the planet through geoengineering. From the report:
Anthropogenic CO2 removal [carbon dioxide removal or CDR] has the potential to remove CO2 from the atmosphere and durably store it in reservoirs (high confidence). CDR aims to compensate for residual emissions to reach net zero CO2 or net zero GHG emissions or, if implemented at a scale where anthropogenic removals exceed anthropogenic emissions, to lower surface temperature.
So not the instinctively scary “Let’s spray sulfur dioxide aerosols into the air to duplicate the climate effects of volcanic eruptions” kind of geoengineering. But removing CO2 from the air is an active human intervention. Understanding that reality helps explain why so many traditional environmentalists are repulsed by the notion. They see a world already pushed out of ecological balance by unchecked capitalist consumerism. According to this view, even the most clever technical fix can’t replace a civilizational shift based on a deep awareness and respect for Earth’s fundamental carrying capacity. Even geoengineering that removes rather than offsets CO2, such as tech that vacuums carbon from the sky or massive reforestation projects, has its downsides. From a great HuffPost piece by Alexander C. Kaufman outlines the critique:
A 2019 study in the journal Nature Communications found that [Direct air capture, or DAC], at scale, would consume a full quarter of global energy supplies by 2100. At a moment when the world is struggling to replace fossil fuels with zero-carbon alternatives, the very concept of DAC seems to skeptics like taking out a loan to pay down a debt. . . . To remove significant sums of carbon at scale with [bioenergy with carbon capture and storage, or BECCS] would require huge areas of land and vast amounts of water, competing for space with food crops, natural habitats and human homes ― all of which are expected to face added stress as the world continues to heat up.
The traditional “green” view is neatly summed by Charles C. Mann in his wonderful 2018 book The Wizard and the Prophet: Two Groundbreaking Scientists and Their Conflicting Visions of the Future of Our Planet. (The “Wizard” in the title refers to Nobel laureate scientist and techno-solutionist Norman Borlaug, the researcher given primary credit for the Green Revolution. The “Prophet” is techno-skeptic William Vogt, who created the suite of ideas that became modern environmentalism, including the concept of Earth having a “carrying capacity.” ) Mann: “Worse, geoengineering forever desacralizes Nature; it puts the final seal on the replacement of the authentic, billion-year-old natural world by a new, artificial world whose every surface bears the greasy human fingerprint.”
Though Mann is specifically referring here to the Vogtian perspective on solar engineering, it’s not hard to see how this macroview would create an instinctive rejection of any approach that isn’t built on socio-economic reform. But this latest UN report should bring out the Wizard in all of us.
The Shorter Reads
💪 What healthier Americans are worth to themselves and to America | In the new analysis, “All’s well that ages well: The economic value of targeting ageing,” economists Martin Ellison and Andrew Scott, along with geneticist David A. Sinclair, note that the dramatic increase in life expectancy over the past 150 years has shifted the “disease burden” toward chronic non-communicable diseases such as dementia, cancer, chronic obstructive pulmonary diseases, cardiovascular diseases, and diabetes. These NCDs are estimated to cause over 71 percent of deaths globally.
Employing a “value of statistical life model” allows ESS to place a monetary value on “various hypothetical interventions that lead to improvements in life expectancy, compressions of morbidity and delays in ageing.” Their core finding:
Based on current US health and longevity data, we show that compressing morbidity is more valuable than any further gains to life expectancy. Our calculations suggest substantial value in treatments that target ageing and that these gains exceed those from focusing on individual diseases. We also reveal a striking dynamic whereby the better society gets at ageing, the more it values further gains to ageing.
The authors calculate that a lowering of mortality rates that increases life expectancy by one year relative to its current 78.9 years is worth $118,100. Each additional improvement is valued less, partly because health is declining with age. But the value of delaying aging means increasing life expectancy by an extra year is worth $178,700 to the individual. ESS: “This is larger than for just increasing life expectancy because health is also improving. Complementarities between health and lifespan also mean that diminishing returns operate more slowly.”
To further illustrate their point, the researchers look at the drug metformin, a diabetes treatment being investigated for its anti-aging properties. What if it should really work to postpone the occurrence of multiple aging-related diseases? Using that hypothetical, ESS compares the gains from metformin to eradicating major diseases such as cancer and dementia.
ESS:
As expected, the economic value of delaying ageing is substantial and frequently larger than that of eradicating major single diseases. … The gains from eradicating a single disease are substantial but are limited by the presence of other illnesses – for example, the gains from eradicating cancer are limited because of the incidence of dementia. In contrast, delaying ageing reduces the incidence of multiple diseases and so limits these competing risks.
🌌 Thinking realistically about asteroid mining | America’s return to manned spaceflight in 2020 was perhaps the biggest headline in space news last year. But the massive 90 percent drop in launch costs in recent years — largely due to SpaceX’s innovations — is the most significant ongoing story. High launch costs have been a long-term barrier to humanity accessing and exploiting space, from low-Earth orbit to the Moon and beyond. “The effect of decreasing prices for space launch might resonate most strongly with those businesses seeking to expand beyond earth’s atmosphere. . . [and] access. . . a previously unavailable market of new resources in space,” a recent Deloitte analysis explains.
Specifically, that cost decline is why speculation about asteroid mining can now be found in the financial press and Wall Street reports, and not just in science fiction. A recent Financial Times piece highlights the private sector players, noting that business interest is likely to spike when a NASA probe to the metallic 16 Psyche asteroid — expected to launch next year — approaches its destination in 2026. Fun fact: The value of all the nickel and iron that forms 16 Psyche (named, by the way, after the Greek goddess of the soul), is estimated at $10 quintillion, “or about 100,000 times the world’s total economic output,” the FT helpfully adds. Also, this amazing chart:
And here’s MIT astronomer Sara Seager’s take on asteroid mining, taken from her appearance at an AEI event last March:
But the reality in terms of space science is that we know how to get to an asteroid. We know how to land on asteroids — at least, the Japanese landed. We know how to bring material back. Right now, NASA has OSIRIS-REx, which scooped up a tiny amount of an asteroid, on its way back. So we absolutely can put all the components together. Now, we don’t know how to drill on the asteroid. We don’t know how to chemically sort the material we need to bring back to Earth. But we actually do know how to get at least 90 percent of the job done. It’s just so far away that people don’t want to really engage.
📈 Goldman Sachs on a business investment rebound | Any serious forecast for a boomy New Roaring Twenties is really a forecast for a economically productive decade, certainly compared to the previous decade (well, decade and a half). And embedded in any such sunny productivity forecast is probably an expectation of increased business investment, which averaged just under 4 percent annually in the five years before the COVID-19 pandemic.
A bit of good news, then, from a new Goldman Sachs analysis that predicts a 7 percent annualized growth rate in business investment for the second half of this year, followed by a 6 percent rate next before a deceleration to 4 percent in 2023 and 2024. This is in line with the bank’s broader forecast of exceptionally strong growth this year and next followed by a return to pre-pandemic trend growth.
The near- to medium-term GS bullish case has four parts. First, there’s plenty of general business optimism based on surveys and earnings calls. Second, although the shift to remote work has led to an office space oversupply, it also has led to stronger IT investment, and GS expects that to continue. Third, oil and gas investment should continue to recover, although not spectacularly, and “the rise of clean energy could provide a tailwind later in our forecast horizon.” Fourth, Goldman expects only a modest — well, $900 billion — corporate tax hike in the upcoming reconciliation bill. GS: “. . . we expect any impact will be small because capex has been relatively insensitive to recent tax changes and investment incentives included in the bill should dampen its impact.”
💊 The opioid epidemic: When innovation and regulation go bad | Given the pro-innovation bent of this newsletter, a paper titled “When Innovation Goes Wrong: Technological Regress and the Opioid Epidemic” is sure to get my attention. Economists David Cutler and Ed Glaeser argue that increased demand isn’t the root cause of the opioid epidemic that has killed nearly a million Americans over the past decade: “We show that changes in demand-side factors alone, such as physical pain, depression, despair, and social isolation can only explain a small fraction of the increase in opioid use and deaths from 1996 to 2012. . . . Taken as a whole, however, changes in pain, negative affect, despair, and economic insecurity predict only one-quarter of the increase in prescription pain reliever use.”
Rather, as the title of the paper suggests, the problem is one of supply created by two entrepreneurial innovations. First, there was a minor technical innovation, the time-release system of drug delivery. Second, there was marketing innovation that enabled Purdue Pharma to persuade doctors that patients wouldn’t become addicted to opioids. From the paper:
Indeed, the recent opioid cycle is reminiscent of the supply-driven cycles seen for morphine in the 19th century and heroin in the early 20th century. In each of these cases, a pharmaceutical company produced a new and supposedly safer version of opium. Consumers bought the new drug, only to learn that it was no less addicting. Demand falls until the stock of addicts decline and memories fade, whereupon the cycle starts anew. . . . The larger message of the opioid epidemic is that technological innovation can go badly wrong when consumers and regulators underestimate the downsides of new innovations and firms take advantage of this error. Typically, consumers can experiment with a new product and reject the duds, but with addiction, experimentation can have permanent consequences.
It’s an important paper. If you’re interested in finding out more, I podcasted with Glaeser not long ago. Here’s that chat, along with a transcript.
The Micro Reads
We Need to Build Our Way Out of This Mess - Eli Dourado, NYT | “To become a nation that builds, we must tear down the regulatory obstacles. . . . If we want to build infrastructure as well as housing, we need to address environmental review as well as zoning.”
“Making a (Really) Wild Geo-Engineering Idea Real” - Future, a16z podcast|
“Why the Productivity Boom Isn’t Over” - Justin Lahart, WSJ | “Moreover, it seems a stretch to think that the productivity-enhancing adaptations that businesses and workers have adopted during the course of the pandemic aren’t going to stick. Some of them could even have a lot more room to run.”
“The Interpersonal Economy: Automation, Employment, and You” - Joseph Politano, Apricitas | “In the extremely long run, it is possible that the limits of the human economy will eventually be reached. At some point the economy might be so large and complex that we either run into physical limits to growth or decide to satiate all our demands without working. However, these are ideas that belong either in the pages of science-fiction novels or alongside discussions of the heat death of the universe - they are not relevant to the economics of anyone living today. It strikes me as the same vein of thinking that lead Victorian era Londoners to worry that their city would not be able to clean up after all its horses if the economy kept growing - narrow extrapolation of current trends extremely far into the future without examining underlying assumptions or implications.”
Boosting brain health is key to a thriving economy - Megan Greene, FT | “Boosting brain health would not only heal the labour market, it is also the key to a thriving economy over the long term.”
Nova: The Apollo rocket that never was - Amy Shira Teitel, Astronomy | “Nova was conceived as both taller and wider than the Saturn V, and almost twice as powerful. Its first stage was powered by eight F-1 engines, each of which could deliver 1.5 million pounds (680,000 kg) of thrust — bringing the rocket’s total power to a whopping 12 million pounds (5.4 million kg) of thrust at launch.”
Five Fictional Space Colonies From the Post-Disco Era - James Davis Nicoll, Tor| “Gerard K. O’Neill’s vision of space colonies was particularly comforting to 1970s anxieties. Soaring population? The asteroid belt has enough material to build habitats promising many times the surface area of Earth! Energy crisis? Have said habitats pay for themselves by building solar power arrays IN SPAAACE!”
How Exposure To Pollution Quietly Shapes The American Workforce And Economy - Claudia Persico, Innovation Frontier Project | “The prevalence of pollution exposure is a significant obstacle to improving health, education, and economic growth in the United States. . . . To maximize the benefits of interventions, they should be targeted at cleaning up pollution near cities where the greatest numbers of people are exposed.”
Seems weird to me how there are no asteroids with values in the quadrillions of dollars.