Monday, April 21, 2008

Earth Day Pareto Principle

The Pareto Principle is familiar to many people in its more common derivation, the "80/20 Rule." How many times have we heard that 80% of some result comes from 20% of the associated effort, or some variation on that theme? Businesses often take this to imply that if employees could only be more effective with the other 80% of their effort, then they could deliver truly world-beating performance. This principle can be applied to many other areas, though, and it seems equally pertinent to tomorrow's annual celebration of Earth Day. Climate change has emerged as the largest environmental challenge, at least for the developed world, and a quick scan of the most recent US greenhouse gas inventory reveals that among the numerous sources of the gases implicated in climate change, an effective 80/20 rule applies as well.

As an outgrowth of a recent posting on the ongoing fuel vs. food controversy concerning biofuel, a reader provided a link to an article on a recent study suggesting that food type was more important than the proximity of food sources in determining the greenhouse gas (GHG)emissions associated with our grocery purchases. Surprisingly, the study found that only 4% of life-cycle emissions were associated with food transportation, compared to 83% for food production. With all due respect to cattle ranchers, it appears that reducing our consumption of beef would have a much bigger impact on food-related GHG emissions than avoiding foods grown far away, such as all that lovely Southern Hemisphere fruit that turns up during our winter. But while the global impact of such a choice is hardly insignificant, it would still rank relatively low on the overall 80/20 distribution for GHGs.

The inventory of US GHGs provides a clear hierarchy of priorities for reducing emissions. While the methane emissions from cows contribute more to climate change than cement manufacturing--widely viewed as a highly GHG-intensive industry--and actually make the top-10 of individual sources, they still pale in comparison to fossil fuel combustion. Here is the list, taken from the EPA's 2006 statistics, with some obvious combinations of line items, such as including the methane emissions of natural gas systems in the "Industrial/Commercial" fossil fuel category, and adding manure management and "enteric fermentation" to get "Animal Husbandry":

True to our friend Pareto, the combustion of fossil fuels, along with other uses of them such as asphalt roofing and paving, account for 80% of our total GHG emissions--81.7% if you include the methane emitted from coal mining. The next five sources contribute 11.8%, and everything else, including iron and steel production, cement, and the entire chemical industry, tally to only 6.5% of our total emissions of 7 billion metric tons per year of CO2-equivalent gases. No other single line item exceeds 1% of the total.

That doesn't mean that the smaller sources are unimportant, particularly if they offer quick and easy opportunities for reducing emissions. However, it does mean that we can't solve the challenge of climate change without making enormous cuts in our consumption of coal, oil and, to a lesser degree, natural gas, and by extension in the fuel and electricity that we produce from them. No other rational interpretation of the data is possible. Achieving the Kyoto Protocol's US target of 7% below our 1990 emissions would require eliminating the equivalent of all current emissions from commercial and industrial uses of fossil fuels, while the 50-80% reductions mooted in various domestic cap & trade proposals could only be attained through the massive transformation of the entire energy sector, and indeed of most of the US economy.

Some suggest we can do all this in a manner that will pay for itself, creating new, high-paying industries in the process. As an optimist, I hope they are right; as a realist, I anticipate that we will encounter many painful bumps along the way, some of which might exceed the upheaval we are currently experiencing from the sub-prime crisis. In that sense, our current economic woes provide a useful test of our ability to tackle a problem on the scale of climate change with pragmatism and resolve, rather than with measures that place a higher priority on the appearance of action and the protection of key political constituencies. An effective response to climate change will also require the kind of persistent bi-partisanship with which we approached the Cold War, spanning multiple congressional sessions and presidential administrations. These might be useful criteria to keep in mind not just on Earth Day, but on Election Day.

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