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Weekend reflections

August 18th, 2006

Weekend Reflections is on again. Please comment on any topic of interest (civilised discussion and no coarse language, please). Feel free to put in contributions more lengthy than for the Monday Message Board or standard comments.

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  1. Hermit
    August 18th, 2006 at 17:06 | #1

    Perhaps I’m beginning to sound like a vinyl record stuck in a groove but I think something should be said about Peter Beattie’s chumminess towards the coal industry. The Premier claims Australia contributes only 1.5% toward global GHGs. I disagree; I think the figure is over 6% despite having 0.3% of world population. That comes from about 380 Mt of black coal (much of it exported) and about 70 Mt of brown coal annually. If a tonne of either type of coal produces 3 tonnes of CO2 that puts Oz derived coal emissions at over 1.3 Gt of the world total of 23 Gt which also includes oil and gas derived CO2.

    Secondly the Premier keeps talking about the miraculous advent of clean coal. I take it he didn’t see the ABC Catalyst expose on geosequestration. Despite the supposed neutrality of the ABC I perceived a strong hint that it was all a stalling tactic by the coal industry. It seems some States are now as complicit in this ruse as the Commonwealth.

  2. observa
    August 18th, 2006 at 17:54 | #2

    I have a feeling you’re not the only one interested in the ‘problem’ here Hermit
    http://www.news.com.au/story/0,10117,20160053-1246,00.html?from=public_rss

    “Finlaysons has established a separate area in its practice to focus on emerging climate change issues.”

    That’s really community minded of them to be so concerned about these topical issues of the day wouldn’t you say? Perhaps Pete needs to pop out to lunch with some James Hardie old-timers to chew the fat. They might have some wise advice about 20/20 hindsight and know-all labor pollies.

  3. Ernestine Gross
    August 18th, 2006 at 18:11 | #3

    Hermit, There may be a measurement problem. Emissions from exported coal, generated at the place of burning of the coal, should not be related to the size of the Australian population.

  4. Hermit
    August 18th, 2006 at 19:02 | #4

    EG
    they coulda not exported the coal on principle.

  5. Terje (say TAY-A)
    August 18th, 2006 at 19:51 | #5

    Given your approach Hermit we can blame a lot of the CO2 emissions on a small number of middle eastern countries. How should they be brought to account?

    And lets not forget the CO2 emmissions created by the consumption of food exports. Perhaps the responsible people of the world could stop exporting food to the middle east. In that way we can solve multiple problems all at once.
    ;)

  6. August 18th, 2006 at 20:21 | #6

    Terje, apart from fossil fuel inputs to food production like engine fuels and artificial fertiliser inputs, food exports maintain a CO2 balance because they come from renewable sources that take up CO2.

  7. August 18th, 2006 at 22:11 | #7

    I don’t think that’s what he means ;-)

    I do think Hermit might be onto something.

  8. observa
    August 19th, 2006 at 09:15 | #8

    “Given your approach Hermit we can blame a lot of the CO2 emissions on a small number of middle eastern countries. How should they be brought to account?”
    Too easy! Sic the international wine lawyers onto them ;)

  9. David Michie
    August 19th, 2006 at 13:41 | #9

    Talking of CO2 emissions, John Howard said this in the House of Reps on Wednesday

    According to ABARE, a 50 per cent cut in Australian emissions by 2050 would lead to a 10 per cent fall in GDP, a 20 per cent fall in real wages, a carbon price equivalent to a doubling of petrol prices, and a staggering 600 per cent rise in electricity and gas prices. These are not the calculations of my office. They are not the calculations of the federal secretariat of the Liberal Party. They are the calculations of the Bureau of Agricultural and Resource Economics, a very respected federal government body.

    ABARE actually produced six scenarios four of which show a reduction in GDP of just 3% (or less) spread over 40-odd years. i.e. the impact is negligible. John Howard only quotes the impact of the most extreme scenario where Australia reduces GHG emissions to 70% below ABARE’s business-as-usual reference case (not the 50% claimed).
    I cannot find any reference in ABARE’s modelling to a “600 per cent rise in electricity and gas prices” or a “doubling of petrol prices”. I wouldn’t be surprised if a staffer just made it up.
    This is the ABARE document Howard is quoting from:
    economic impact of climate change policy.
    Read it and judge for yourself.

  10. taust
    August 19th, 2006 at 15:31 | #10

    Re greenhouse emissions. Just for interest and because I found Australia’s standing as the worst per capita emmitter bemusing I looked up our emissions compared to canada’s. Two roughly comparable economies ,countries etc our high temp balanced roughly by their low termp. The comparison revealed that if we could utilise hydrogeneration of electricity to the same extent as Canada and generated a significant amount of electricity by nuclear as they do we could get our per capita consumption down to comparable to theirs.

  11. Ernestine Gross
    August 19th, 2006 at 18:45 | #11

    taust,

    While I would agree that drawing comparisons between Canada and Australia are not as silly as comparing Australia to Hong Kong or Taiwan or the USA, I am very disappointed with the approach to problem solving you seem to suggest, namely copying of solutions which on the face appear to be solutions but which may not be satisfactory after all. It seems to me there is so much talent and energy among Australian people that they are quite capable of solving problems their way.

  12. Terje (say TAY-A)
    August 19th, 2006 at 23:17 | #12

    Taust,

    Canada has a different precipitation level to Australia so hydro is likely to be far more viable there.

    Regards,
    Terje.

  13. Dave
    August 20th, 2006 at 02:45 | #13

    Guys, I’d like to start a quick debate on a possible solution to excessive executive remuneration. Here’s what I think:
    - Executive pay is increasing because by and large shareholders of corporations are allowing it.
    - Overwhelmingly the shareholders allowing the rise in pay tend to be large fund managers and super funds, who usually outvote the small mums and dads (who often vote against payrises)
    - These people have no real incentive to cut down on executive pay. The cut they receive of the funds under management means it isn’t worth their while.
    - All things being equal a company which is tighter on executive pay would outperform one with higher pay growth as studies show there is really no link between executive pay and ‘performance’.
    - Therefore what is needed to correct this market failure are more ‘lean and mean’ super funds, ie a super fund which markets itself to the public promising not only to keep its overheads low, but cut back on excessive executive pay, and lead to higher returns. I’d certainly invest, I wonder if anyone else would?

    Guys your thoughts?

  14. taust
    August 20th, 2006 at 17:48 | #14

    Re Greenhouse comparison with Canada.

    Terje Our far north would have a comparable precipitation to Canada’s south and visa versa.

    Ernestine Why would we waste our most valuable resource (our creative people) when solutions already exist? From the hype over the Olympics our creative people are all very hard at work creating tablea for sporting events. It pays very well.

  15. taust
    August 20th, 2006 at 18:03 | #15

    Re Executive salaries.
    What is wrong with high executive salaries. In total they are far less than the total paid to shareholders or to other classes of employees.
    High rewards (particularly for little effort) leads to high competition for the positions. So if the salaries really are not for actuall scarcities they will fall in time.

  16. John Armour
    August 21st, 2006 at 07:07 | #16

    Dave,

    Executive remuneration is an obscene rort. Thanks for raising the issue.

    If contributors to managed funds didn’t have to surrender their proxies to the fund managers there wouldn’t be a problem.

    Fund managers and the boards of listed companies piss in each others’ pockets.

    taust’s comment that executive remuneration is far less then the dividends paid to share holders is just so irrelevant.

    And so is the comment that high rewards leads to high competition. There is no competition, taust. It’s a closed shop. If there was genuine competition, we’d have better management at a fraction of the cost.

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