State Space Models

All state space models are written and estimated in the R programming language. The models are available here with instructions and R procedures for manipulating the models here here.

Saturday, September 3, 2016

Coal Will Make Reducing Energy Intensity Difficult


The New York Times ran an article on Aug 30 titled The Challenge of Cutting Coal Dependence. The article focuses on the problems Germany, "a leader in the push against climate change", is having reducing dependence on coal production. Coal is Germany's main and dirtiest source of electricity generation. And, the same is true for many other countries, for example the US, China, and India. The problem is how to replace all the jobs that would be lost. No one has a practical answer. 


 The graph above of coal consumption over time (from the NYT article) shows that Germany and the US have basically stabilized their coal consumption. The rest of the world, on the other hand, has not. My main question, when I read the article, was what can we expect from the future.

The graph at the beginning of this post is a forecast of coal production based on the WL20 model (the forecast assumes no policy intervention in the future). It shows that, with relatively narrow bootstrap 98% prediction intervals, coal production will not stabilize until well after the year 2100.
Compare that forecast to the one, also drawn from the WL20 model, of oil production. The model predicts that oil production has peaked, again with a high degree of confidence, and will decline for the foreseeable future (with or without policy intervention).

While we have been optimistic about the role reduced oil production will have in future carbon emissions, we have missed the major roadblock to reducing carbon intensity. Coal is a plentiful and easily obtained resource. Mining coal creates jobs. The NY Times article concludes with a quote from Craig Morris, an environmental blogger: "Several degrees of warming by 2100 may sound scary, but not nearly as much as long-term joblessness just a few years from now."

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