Pollution

By the ton

rsmith — Wed, 09 Aug 2023 02:51:32 +0000

rsmith Tue, 08/08/2023 - 21:51

The Climate Vault purchases carbon permits from multiple cap-and-trade markets to offset carbon emissions while searching for carbon dioxide removal technology. (Dan Page/Theispot)

Susie Allen, AB’09

The University of Chicago Magazine

Summer/23

The Climate Vault banks on cap-and-trade markets to curtail carbon emissions.

A decade ago, the idea of planting trees to compensate for greenhouse gas emissions was all the rage. The notion had intuitive appeal: companies and organizations seeking to offset their carbon emissions would pledge to plant trees, which sequester carbon. But, as always, the devil was in the details. It was difficult to verify that the promised trees actually got planted, and there was no guarantee they wouldn’t be cut down later.

Michael Greenstone, LAB’87, began wondering if there was a better way to offset emissions. In particular, Greenstone—the Milton Friedman Distinguished Service Professor in the Kenneth C. Griffin Department of Economics, the College, and the Harris School of Public Policy—had his eye on government-regulated cap-and-trade carbon markets. Several countries and US states use these systems to establish both a limit and a price on CO2 emissions. The details vary from place to place, but generally, large-scale industrial emitters are required to purchase CO2 permits from a carefully monitored marketplace; the permits can also be bought and sold by other interested parties.

Greenstone saw an opening: “What if you just went into those markets [and] outbid polluters for the right to pollute?” In other words, you could buy a permit and keep it, effectively preventing that metric ton of carbon from ever reaching the atmosphere.

With his friend Andrew Dailey, a cofounder and managing director of MGI Research, Greenstone decided in 2020 to make the long-simmering idea a reality. Together, they recruited two more cofounders—UChicago trustee Donald R. Wilson Jr., AB’88, founder of the trading firm DRW, and Bala Srinivasan, SM’91, PhD’95, DRW’s global head of business development—and dubbed their new nonprofit Climate Vault. The organization works with a variety of institutions, including companies, universities, and other nonprofits, to offset their emissions; these partners make donations to Climate Vault, which uses them to purchase carbon permits from cap-and-trade markets.

In addition to squirreling away permits, Climate Vault is working to incentivize the development of carbon dioxide removal technology. The organization’s eventual goal is to sell its vaulted permits and use the proceeds to fund the permanent removal of an equivalent amount of carbon. In time, as carbon dioxide removal technology gets better and cheaper, selling a one-metric-ton carbon permit may even allow Climate Vault to pay for two metric tons of carbon removal.

Today, thanks to donations from partners including UChicago, Climate Vault has taken about 950,000 metric tons of carbon out of circulation. It’s a number they watch closely. “As Michael likes to say, ‘We wake up in the morning [thinking], how do we get more tons?’” explains Jason Grant, president and COO. (Will they have a party when they hit one million? Grant says their sights are set much higher: “We have a celebration planned when we hit 10 million.”)

The partners that have donated to Climate Vault are attracted to both sides of its one-two punch approach, says head of development Chris Neufeld. In the short term, many hope to achieve significant emission reductions or even reach net zero. The easily measurable and verifiable nature of Climate Vault’s work—one permit always equals one ton of carbon and, unlike a tree, can’t be cut down—provides that reassurance and a meaningful solution. The opportunity to support carbon dioxide removal technology is an added bonus.

The Climate Vault approach also has its skeptics. Some have argued that the organization could skew the cap-and-trade markets by storing too much carbon, forcing regulators to issue more permits. That’s certainly not an immediate problem, Greenstone says—Climate Vault is still a small player in large markets. Even so, the organization has been careful to spread its permit acquisition across multiple markets to avoid any inadvertent effects.

Others question the focus on carbon dioxide removal, pointing out that reliable, cost-effective technology has yet to materialize. But Greenstone argues that dealing with the carbon already in the atmosphere is not just a nice-to-have—if we want to avoid a climate disaster, it’s an imperative. And naysaying carbon dioxide removal could become a self-fulfilling prophecy. “If history has taught us anything, it’s that price signals and market force are really powerful tools for delivering particular social goals,” he says. “We can’t just sit and hope for that innovation to come with carbon dioxide removal.” By signaling the existence of demand, Greenstone believes Climate Vault can “juice the innovation” and create more supply.

To that end, this year Climate Vault issued its second request for proposals from companies developing carbon dioxide removal technologies. Those ideas will be vetted by the organization’s Tech Chamber, which includes science and policy experts. If any companies can achieve verifiable results at a reasonable cost, Climate Vault will sell its 950,000 permits to fund the purchase of 950,000 metric tons of carbon dioxide removal.

If not, they’ll continue the search next year. “We’re confident that we will find some CDR [carbon dioxode removal],” Grant says—but they’re also willing to wait for a company with a technology that meets all their requirements. And while they do, they’ll keep vaulting, ton by ton.

Economics & Business

Economics

Environment

Carbon dioxide

Pollution

Fresh air

rsmith — Tue, 09 Feb 2016 16:01:16 +0000

rsmith Tue, 02/09/2016 - 10:01

(Photography by Beth Flaherty, CC BY-NC 2.0)

Helen Gregg, AB’09

The University of Chicago Magazine

Winter/16

Fourty-six years after the passage of the Clean Air Act, the Energy Policy Institute at the University of Chicago examines the consequences of coal plants on our health and our planet.

Years since the passage of the Clean Air Act: 46

Millions of life-years saved in the United States in the areas studied because of cleaner air, according to the Energy Policy Institute at the University of Chicago: 336

Increase, in years, of the average Chicagoan’s life expectancy since the passage of the Clean Air Act: 2.1

Average percent decrease in home value when an industrial plant opens within a half mile: 11

Percent increase in risk of low birth weight within one mile of an industrial plant: 3

Degrees Fahrenheit by which fossil fuel combustion has already warmed the planet: 1.7

Law, Policy & Society

Pollution

EPIC

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Particulate matters

jmiller — Wed, 06 May 2015 18:37:01 +0000

jmiller Wed, 05/06/2015 - 13:37

This Beijing bicyclist was Greenstone’s exhibit number one for the pollution costs of China’s economic progress. (Photography by How Hwee Young)

Kathryn Vandervalk, AB’16

The University of Chicago Magazine

May–June/15

Economist Michael Greenstone studies the human cost of China’s pollution in the Huai River Valley.

One of the first bits of evidence that UChicago economist Michael Greenstone, LAB’87, showed his audience during a January symposium on pollution in China was a photograph. In it, a Chinese man rode a bicycle. He wore goggles, his electric blue facemask standing out against the bleak gray sky.

“While economic progress has led to incredible improvements in well-being in China, it hasn’t come for free,” Greenstone explained. The cyclist in the photo “feels compelled to wear a face mask to block out the pollution. And for those of you who’ve been to China, in many of the big cities it’s not uncommon that you can go days without seeing the sun.” Greenstone, director of the Energy Policy Institute at Chicago (EPIC) and director of UChicago’s Energy and Environment Lab (part of the new Urban Labs initiative) was speaking at a symposium called China’s Pollution: The Costs, Challenges, and Steps Forward, cohosted by EPIC, the Paulson Institute, and the University’s Center for International Studies.

To illustrate the costs of pollution in China, Greenstone presented research on the effects of pollution on life expectancy. The Huai River plays a central role in the research; it is the dividing line between north and south China—in the winter, temperatures north of the river are normally below freezing (including in Beijing), while those in places south of the Huai River are generally above freezing.

A government initiative colloquially called the Huai River policy provides free coal during winter months to residents living on the north side of the river. Greenstone said that while the policy initially seemed beneficial, it caused a sharp difference in air pollution between north China and south China. Zhu Rongji, China’s former premier who had been a resident of Shanghai, told Beijing officials in 1999, “If I work in your Beijing, I would shorten my life at least five years.”

Greenstone set out to test the premier’s claims. A past member of the EPA Science Advisory Board’s Environmental Economics Advisory Committee, a faculty director of the E2e Project (an initiative devoted to finding cost-effective ways to reduce fossil fuel consumption), and the Milton Friedman Professor in Economics at UChicago, he’s an expert in energy and environmental economics. His team looked at the levels of airborne particulate matter pollution on both sides of the Huai River. (Particulate matter is composed of air carcinogens containing solid particles and liquid droplets of hundreds of chemicals.) The study is based on the idea that the particulates are the only determinant of life expectancy that discretely differ on the north and south sides of the river. Indeed, they found support for this assumption in other observable determinants of health, like smoking and diet.

The team found that north of the Huai River, where there were heating units, suspended particulates concentrations were about 550 micrograms per cubic meter, compared to roughly 350 micrograms per cubic meter south of the river. Greenstone pointed outside, to the Chicago winter sky. “If you want to put that in context, because it’s a really enormous number, outside today I suspect it’s like 50.”

By focusing on the area surrounding the Huai River, Greenstone’s team was able to compare life expectancies of the people living to the north and to the south: one set of data including the pollution from the heating units, and one without. To even Greenstone’s surprise, the data showed that people in the north are living about five and a half years less than people in the south.

To ascertain that this difference in life expectancy was coming from the Huai River policy’s particulates and not other factors, Greenstone tested the levels of other air pollutants on the north and south sides of the river. Also to confirm that the causes of death were related to air pollution in general, he isolated the data of people who died from cardiorespiratory causes. He found that the elevated mortality rate was almost entirely due to a 37 to 50 percent increase in the cardiorespiratory mortality rate, suggesting strongly that there is a relationship between life expectancies and air pollution.

Greenstone emphasized that reducing particulate concentrations is important all over the world. “Obviously if you’re in China, the Huai River policy is incredibly important. If you’re somewhere else in the world, what you really might be interested in is, well, if you give me a 100 unit change or a 50 unit change in particulates, what is that going to mean for my life expectancy?” For those who live somewhere with a hundred extra micrograms per cubic meter of particulates, he says, “life expectancy will be reduced by somewhere between two and three years.”

Applying that number to India, he concludes that the 660 million people in regions where pollution concentrations exceed India’s standards would live more than three years longer on average by bringing the country into compliance with its own environmental codes. Greenstone’s work is important not only to the more than 500 million in northern China (who collectively are losing 2.5 billion life years) but to those who breathe polluted air everywhere in the world.