Home > Economics - General, Environment > How much does it cost to save the planet?

How much does it cost to save the planet?

July 31st, 2007

There’s been quite a bit of discussion here and elsewhere about the cost of large (60 per cent or more) reductions in CO2 emissions. A lot of people are intuitively convinced that since everything we do uses energy, large reductions in energy use can only be achieved at the cost of large reductions in living standards. Economic analysis says the opposite. Typical estimates of the cost of such reductions are in the range 1-3 per cent of income for the world as a whole. Australia is more energy intensive, and ABARE (by no means biased low on this kind of thing) gives a range from 1.7 to 3.4 per cent for plausible scenarios. Only by rigging the game could ABARE get the high estimate of 10 per cent, quoted by Howard a while back. And even a 10 per cent reduction in income, by 2050, would not actually be noticeable against the background noise of macroeconomic and individual income fluctuations. On plausible projections, it would mean average income would increase by 110 per cent instead of 120 per cent.


When people talk about big transformations arising from climate change mitigation or peak oil they surely have in mind something more dramatic than marginal reductions in the rate of income growth implied by even the worst-case ABARE scenarios. In my experience, pointing to the results of economic models does not help much here. So, let’s take a look at an absolute upper bound for the electricity side of demand, in which we leave electricity demand unchanged and replace 60 per cent of it with photovoltaics, the most expensive of the alternatives, but also one that has no effective limit on supply (I will deal with quibbles about supply variability in comments if desired). Unsubsidised photvoltaics are about 5 times as expensive as coal (25c/KwH vs 5c). Australia’s total electricity output is around 250 terawatt-hours (billion Kwh) so the additional cost if we replaced 60 per cent of that with solar comes out at 150*0.2 billion or $30 billion which is about 3 per cent of GDP (approximately 1 trillion). You can get the same answer by looking at the share of electricity generation in GDP (a bit under 1 per cent). Electricity accounts for about a third of all CO2 emissions, so a simple scaling suggests a cost of 9 per cent if similarly expensive backstops were adopted in other areas.

Of course, this estimate is way too high. In reality, most of the savings would be achieved through conservation, at much lower cost, as the economic models show. I’ve already done exercises of this kind and the point was made by Nanni on the RSMG blog not long ago.

But, if anyone would like to present a plausible calculation of their own showing that the cost of a 60 per cent reduction in emissions would be significantly in excess of 10 per cent of income, now is their chance.

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  1. July 31st, 2007 at 19:57 | #1

    i believe the manufacture of solar cells uses a lot of electricity. the transition period from mostly coal to mostly solar will have a big bump in demand. won’t this have a significant depressing effect on the economy, for some period of 10-20 years?

  2. Austin
    July 31st, 2007 at 21:29 | #2

    I’m not sure that this demand “bump” would necessarily occur. Remember that with many renewable energy sources that input energy is required mainly during production and not for ongoing running. As the percentage of production changes, less energy would be used to mine coal and mill it and transport it to the power station and what not. So provided the time frame of the transition is long enough, this spike in demand would be smeared out and probably barely noticeable.

    I don’t know the information about how much energy is required for PV production, so this is kind of speculation. Any reports on this? It would be interesting to know what energy is required and how it scales, for the old way of making PV cells and the new ways. But my gut feeling is that there isn’t many orders of magnitude involved, otherwise no one would actually produce these things commercially today at all.

  3. July 31st, 2007 at 21:34 | #3

    At the risk of sounding like a Howard government minister, some quibbles…

    Everything I’ve read suggests that to replace X megawatts of fossil power you need 3-4 times as much capacity in renewables due to supply variability. Also, you need to include the costs of energy storage (a huge technological challenge in itself) or backup gas-fired power to keep the lights on when the sun isn’t shining anywhere and the wind isn’t blowing anywhere. You also need to add the cost of a much smarter grid to cope with the intermittent nature of renewables, and some high voltage DC transmission lines across the nation to connect up all these intermittent sources.

    Having said that, I really don’t think electricity generation is the big problem (all the technologies required to clean up electricity generation already exist, its just a matter of spending an awful lot of money and finding the political will to do so) the big problem is transportation. Cleaning up transportation will require new technologies and an entirely new refuelling infrastructure that we really haven’t figured out yet. I think we can safely say that hydrogen and biofuels are dead-end technologies, which leaves battery powered electric vehicles. If that’s the case, we will need an awful lot more clean electricity to replace the 40% of the world’s energy that is currently supplied by petroleum.

    Besides, this is a purely academic discussion because no politician in the land is going to significantly raise energy prices for the forseeable future. It is political death, and everyone knows that.

  4. July 31st, 2007 at 21:36 | #4

    FYI: Ender had a go at calculating the costs of HVDC across Australia last month.

  5. Hermit
    July 31st, 2007 at 21:39 | #5

    I’m not sure that adding the incremental effect of technology switches sector by sector will give the correct result. Involuntary fuel conservation may give a more vivid example because of compounding threshold effects. When people can’t afford to drive to work, groceries get delivered to supermarkets or farmers use fertiliser or drive tractors, then total activity hence dollar GDP has to nosedive. Moreover there is path dependence; as al loomis points out we need to set aside remaining fossil fuel energy to prepare for increased solar. Our present focus of preserving income doesn’t seem to appreciate such set-asides.

    Maybe the whole exercise needs to be done in per capita physical terms not GDP. For example with 25m population we can use X litres of water, Y kilowatt hours of energy per head, and so on. While a possible future may be qualitatively better, I’m almost sure it won’t be better materially so income preservation may be the wrong objective.

  6. Hermit
    July 31st, 2007 at 21:54 | #6

    Me again. Time for a reality check on HVDC. From what I can gather Tas Hydro can get up to $1 per kwh selling peak power via Basslink and re-import
    dirty coal power for 3c per kwh. Result more CO2 emissions and the dam levels are chronically lower (on top of GW) compared to the old days of energy isolation. The Basslink cable has just been sold to a Singapore outfit for over $1bn I believe. Alinta has bought the gas peak generator near Launceston and is building another one but won’t say where the gas is coming from…WA when Bass Strait runs out?

    Theory: HVDC helps renewables. Reality: HVDC helps coal.

  7. Ian Gould
    July 31st, 2007 at 22:05 | #7

    “i believe the manufacture of solar cells uses a lot of electricity.”

    Al, this is something of an urban legend. Energy payback for solar cells is usually reached in a few months.

  8. July 31st, 2007 at 23:41 | #8

    The problem is that one is fighting psychological phantoms and various kinds of wish fulfilment.

  9. mugwump
    August 1st, 2007 at 00:14 | #9

    Perhaps the economic arguments are intuitively implausible because they are equilibrium arguments. It’s the transition from here to there that matters to people today, and the intuition that our energy dependence means “large reductions in energy use can only be achieved at the cost of large reductions in living standards” is probably correct.

    Nearly every price today has an in-built dependence on the cost of energy. Hence nearly every aspect of our lifestyles has been optimized for the current cost of energy: the houses we live in, the food we eat, the vehicles we drive, the distance we live from loved ones, etc. Every one of those things may become arbitrarily suboptimal if energy costs increase by a factor of three.

    Take one simple example: air travel for grandchildren to see grandparents. I know many ex-pat Adelaidean parents who live in Brisbane, Melbourne or Sydney, with their own parents living in Adelaide. Either the grandparents or grandchildren travel many times a year between the cities for quick weekend trips to stay in touch. Obviously, part of the original decision for the children to relocate to the east coast, or their decision to stay on the east coast after the birth of their children, depended on very low air travel costs. For many of them, that decision may well have been very different if the cost of air travel was three times greater. The numbers may be different but you get the idea.

    Or to put it another way, you can sprinkle a 1%-3% GDP cost around the economy in such a way that it causes a lot more than a “1%-3%” upheaval in people’s lives.

  10. rickwood
    August 1st, 2007 at 00:20 | #10

    Payback time for solar cells in energy terms is a few years, give or take
    (see http://www.energybulletin.net/17219.html). Substantially longer (or perhaps not at all) in economic terms at current prices, without a carbon tax.

    Solar cells aside, its pretty clear that efficiency measures alone get us a long way toward 60% with pretty minor changes to lifestyle. This is without significant changes to technology. Replacing all electric storage hot water with some simple solar hot water system is an easy start. Roof and wall cavity insulation and more efficient appliances are more low hanging fruit, without any real impact on living standards. General vehicle fleet conversion to smaller hybrid vehicles (petro/electric) could provide a 50% reduction in private transport energy without significant impacts on personal mobility. The list goes on. The sum total of efficiency gains through moderate behavioural adjustment and moderate technological change (i.e. that we know how to do NOW) could easily approach 60%.

    Nuff said.

  11. August 1st, 2007 at 07:31 | #11

    y, rick, the simple life is the ultimate goal because that’s all we can sustain, and probably only at a lower population. bicycles, dirigibles, and sailing ships are going to make a big come back.

    but the economic disruption which our dear leader is trying to prevent by shoring up the coal and uranium mining shares seems real to me: there’s not enough profit in bicycle manufacture to support the people who were living on dividends from general motors. even if we sustain an electric car culture, they are much cheaper to make than the petrol dinosaurs currently poisoning the planet. that doesn’t mean they’ll sell cheaper, but we live in hope.

    we are going to put solar cells on every roof, and the sooner the better. but it won’t be painless. airy assertions that payback time is a month, or a year, doesn’t answer the question i put: how much energy must be diverted to solar cell manufacture to reach a target of x% by 2060? i hope to see an equation dealing with this situation soon, economists must have some use.

    then there’s the cost of training installers of solar cells, and removing their labor from (i hope) coal and uranium mining. i’ve been pleading with solar power small business for months, all are booked up and not likely to appear on my roof soon. we’re going to need many more tradesmen in this area, and they won’t work for free.

  12. jquiggin
    August 1st, 2007 at 07:52 | #12

    Mugwump, you’re exactly right, but now apply the argument in reverse. If emissions prices increase steadily between now and 2050 people will make location decisions that reflect those prices, and demand for travel will decline accordingly, without anyone feeling much actual pain.

    The more gradual the adjustment the lower the cost, which is why we should get started now, and why we should have started 10 years ago.

  13. August 1st, 2007 at 08:44 | #13

    ProfQ wrote:

    The more gradual the adjustment the lower the cost, which is why we should get started now, and why we should have started 10 years ago.

    I agree entirely, but we didn’t start ten years ago, we’re unlikely to do anything significant for another 10 years, which is why the pain will be worse when it does come.

    rickwood wrote:

    The sum total of efficiency gains through moderate behavioural adjustment and moderate technological change (i.e. that we know how to do NOW) could easily approach 60%.

    IIRC emissions from households represent just 20% of total emissions, and transport around 14%, personal transport is probably two-thirds of that. If we replaced all the electric storage hotwater systems, insulated every house and forced everyone to sell their SUV and drive a little hybrid, the best you would do is trim a few percent off the total.

    We would achieve more by shutting down half-a-dozen aluminium smelters.

  14. August 1st, 2007 at 09:17 | #14

    I have no quibble with Mr Quiggins article (to do so would be a Quiggin quibble). In some quarters I agree that there is an unrealistic level of alarm in relation to emission reduction cost. None the less the correct comparison is not with GDP but with the cost of inaction and/or the cost of mitigating the effects. I’m not alarmed by either of those costs either. If I had to be fearful it would be toward the rationalisation of global intervention in national economies, however we have failed and flawed morph monsters like the IMF doing that already and it has only killed people that I don’t know personally.

    Austin – the payback in energy for photovoltaics is fine. However commercialisation does not prove that point. Disposable torch batteries return well below 100% of the energy consumed in manufacture and yet they are a commercial success.

    Like the TB caused by horse dung on our streets I think that CO2 emissions will be reduced more by technological innovation than by political action. Any spare political capacity should be employed combating that far more destructive man made force called big government (25% more federal public servants in the last 5 years, 35%. more real per capita federal expenditure in the last 11 years and more new *#@ laws than you can poke a stick at). It’s destroying lives and liberty in the hear and now and it’s out of control.

  15. wilful
    August 1st, 2007 at 11:05 | #15

    Of course the obverse consideration has to be raised – what is the cost of inaction?

    You can only determine if the pain of adjustment is worthwhile if the costs of inaction are greater.

    Unfortunately ecological economics is still an infant school, and placing dollar valuations on much of what we cherish is at best an approximation. I would happily pay far more than 10% of my income to avert the worse scenarios identified by the IPCC (particularly since they’re conservative), but I value biodiversity higher than others may.

    All reasonable estimates of the direct economic costs do seem to indicate a major impact, but principally on those that can afford to adjust the least.

  16. Tim
    August 1st, 2007 at 11:39 | #16

    Terje

    What is “political capacity�, anyway? The ability to implement good policies which the electoral majority nonetheless oppose? I think the whole reason JQ promotes these ‘good policies’, and would presumably wish us to do the same, is to eventually convince voters to support them so that no political capital need be sacrificed. Surely you don’t want that effort sidetracked.

    The implication that reducing emissions is a lower priority than shrinking the bureaucracy also isn’t really supported by projections of the economic and human costs of climate change. ‘Lives and liberty’ are clearly endangered. Anyway, emissions reductions and ‘government reductions’ are only mutually incompatible if the latter is done first, and badly.

    And the ‘rationalisation of global intervention in national economies’ is easy, surely: CO2 emissions have global externalities. And global collective action is not bound to fail in its goals, although the belief that this is necessarily the case reduces the chances of the right interventions being applied.

    I enjoyed this quote, applied to climate change…
    “Never before have we, on a planetary scale, so needed to combine pessimism of the intellect with optimism of the will.�
    …but lets not substitute pessimism in the form of “lets give up�, for the useful “hard-headedness� kind.

  17. observa
    August 1st, 2007 at 11:55 | #17

    “You can only determine if the pain of adjustment is worthwhile if the costs of inaction are greater.”

    “All reasonable estimates of the direct economic costs do seem to indicate a major impact, but principally on those that can afford to adjust the least.”

    True enough, but then there is the small matter of the costs of being seen to do something
    http://www.atimes.com/atimes/Global_Economy/IH01Dj01.html

  18. August 1st, 2007 at 12:07 | #18

    Just a thought on how higher energy prices might affect behaviour and future emissions trends…

    Since 2001 we’ve seen petrol prices rise from around 85c/L to around $1.25/L today, an increase of around 47% in nominal terms, yet emissions from the transport sector are up around 10% over the same period.

    This suggests to me energy taxes in the order of 10-20% really aren’t going to change behaviour, especially when it comes to transportation.

    Of course, by freezing the fuel excise at 38c/L in 2001 the Howard government has presided over a large reduction in fuel taxes, and the strengthening Aussie dollar over the same period has further protected the Australian motorist from rising oil prices.

    Still, the price rise since 2001 has been considerable and overall emissions are up strongly. Now you may say the economy has grown strongly over that period, and the “emissions intensity” is down, but the name of the game is to reduce emissions in absolute terms, not in economic terms. The atmosphere doesn’t care how efficient the economy is.

  19. aidan
    August 1st, 2007 at 13:02 | #19

    Carbonsink .. wasn’t there a 6% drop in fuel consumption when the price spiked in the $1.40-$1.50 range? Clearly petrol is still too cheap as there are large number of very fuel-inefficient cars on the road (compared to Europe for example).

    With regards to efficiencies, has anyone suggested that the current tax-advantages enjoyed by companies purchasing vehicles be modified (over some time period) so that it is only available to vehicles that meet certain efficiency/emission targets?

    I’d like to see lower registration costs for fuel efficient vehicles too, but states and territories already have such limited sources of revenue they are unlikely to forgo income from this area.

    As an aside, is there any reliable disinterested source of information about solar hot water options? When Rudd sweeps into power I wish to make use of $10k of his money. I think my best option (I’m in Canberra) is those evacuated tube systems, feeding into a non-boosted tank, which then goes into the inlet of an on-demand gas system.

    I’d like to know if pre-heated water for on-demand gas has a significant effect on hot-water lag times. My in-laws have on-demand gas and half the time they boil the jug for hot water in the kitchen as it takes so long to get the hot through and they waste huge amounts of cold water in the process.

  20. jquiggin
    August 1st, 2007 at 13:37 | #20

    Carbonsink, the shortrun elasticity of demand for energy in transport is very low, since the only real margin for adjustment is number of trips. If you look at the post-73 experience, it shows that a sustained increase in prices produces a substantial drop in demand. Of course, I agree with you about fuel excise and Rudd is no better in this respect.

  21. August 1st, 2007 at 14:11 | #21

    Tim – your suggestion that we can’t put a lid on the expansion of big government until after AGW policies are all bedded in is silly and it’s the same old game played by statists everywhere. Technically we can easily shrink expenditure on a per capita basis back to where it was in the Keating years. However people such as myself will remain unsupportive of new regulations and new expenditure until we see some tangible roll back of existing regulation and some tangible rollback of existing government expenditure.

  22. August 1st, 2007 at 14:32 | #22

    If you look at the post-73 experience, it shows that a sustained increase in prices produces a substantial drop in demand.

    Fair enough, but the post-73 experience was pretty painful, and to get similar reductions in demand, similar levels of pain will have to be induced. In the case of transport fuels the oil market might do this by itself (despite the best efforts of Howard, Rudd, Beattie et al to protect us) but in the case of electricity the pain will have to be artificially inflicted by government by putting a price on carbon.

    You can’t on one hand say that “most of the savings will be achieved through conservation”, but on the other hand say there will be no economic pain, because it is this very pain that will force consumers of energy to conserve.

  23. August 1st, 2007 at 14:34 | #23

    ProfQ wrote:

    If you look at the post-73 experience, it shows that a sustained increase in prices produces a substantial drop in demand.

    Fair enough, but the post-73 experience was pretty painful, and to get similar reductions in demand, similar levels of pain will have to be induced. In the case of transport fuels the oil market might do this by itself (despite the best efforts of Howard, Rudd, Beattie et al to protect us) but in the case of electricity the pain will have to be artificially inflicted by government by putting a price on carbon.

    You can’t on one hand say that “most of the savings will be achieved through conservation”, but on the other hand say there will be no economic pain, because it is this very pain that will force consumers of energy to conserve.

    P.S. can you delete the previous comment please?

  24. sillytree
    August 1st, 2007 at 15:27 | #24

    I think the thing policy makers need to realize is that carbon emmissions are something everyone feels responsible for and so the cost of carbon reductions can be shared across the board without raising a big stink from just business.

    The simplistic thing to do is raise taxes on fuel but big carbon reductions can be attained more effectively without slowing down the wheels of economic progress. For example, governments should seriously consider a container tax on all containers that leave and enter Australia. This would raise $billions which could be used in a number of ways. First, to appease business, a large percentage of the money would be used to improve infrastructure for goods movement, making it more flow more efficiently…think of better railroads, bridges, port terminals etc. Next, use a large chunk of the funds to get trucks off the road that are over five years old through a trade-in program. You could also have a program to retrofit trucks to reduce their emmisisons. Same idea with diesel locomotives. Studies have shown that programs such as these can reduce emissions by 50% as goods movement continues to grow at a 15% pace.

  25. christopher
    August 1st, 2007 at 16:39 | #25

    Carbonsink – road transport emissions (proxied by fuel consumption) have fallen since the peak in 2003-04 – albeit slowly. Total fuel consumption for all road transport in 2005-06 was only 2% below the 2003-04 peak (with petrol down nearly 5%, but diesel only slightly down, and LPG up – so some substitution effects within the mix – but overall down).

    Never before have we experienced two consecutive years of decline in energy consumption in road transport.

    And the growth in consumption for the period post 2000-01 was much
    lower than for almost all periods prior to that.

    As an aside, post ’73 consumption growth didn’t change much in Australia (unlike the rest of the world) because of the domestic oil pricing arrangements, which were removed before the next price spike. But even post ’78 consumption was more a flattening.

    And as John said, the long run response is much higher – a price elasticity in the range of 0.8-1 is the literature consensus.

    It was recently estimated that if Europe had the same petrol taxes as the US, fuel consumption would be nearly 50 per cent higher. Conversely, if the US had petrol taxes at the highest European levels, US consumption would be one third lower (assuming time for long run adjustment).

    Prices matter, and so does income growth as you point out. The trick will be to have prices drive both conservation and technology development so that over the long term we can substitute away from carbon based transport, before income and population growth drives up total emissions following the price driven conservation adjustment.

    This is a problem more tricky than solving emissions from electricity generation.

    cheers,
    Christopher

  26. christopher
    August 1st, 2007 at 17:08 | #26

    Carbonsink – road transport emissions (proxied by fuel consumption) have fallen since the peak in 2003-04 – albeit slowly.

    Total fuel consumption for all road transport in 2005-06 was only 2% below the 2003-04 peak (with petrol down nearly 5%, but diesel only slightly down, and LPG up – so some substitution effects within the mix – but overall down).

    Never before have we experienced two consecutive years of decline in energy consumption in road transport.

    And the growth in consumption for the period post 2000-01 was much lower than for almost all periods prior to that.

    As an aside, post ’73 consumption growth didn’t change much in Australia (unlike the rest of the world) because of the domestic oil pricing arrangements, which were removed before the next price spike. But even post ’78 consumption was more a flattening.

    And as John said, the long run response is much higher – a price elasticity in the range of 0.8-1 is the literature consensus.

    It was recently estimated that if Europe had the same petrol taxes as the US, fuel consumption would be nearly 50 per cent higher. Conversely, if the US had petrol taxes at the highest European levels, US consumption would be one third lower (assuming time for long run adjustment).

    Prices matter, and so does income growth as you point out. The trick will be to have prices drive both conservation and technology development so that over the long term we can substitute away from carbon based transport, before income and population growth drives up total emissions following the price driven conservation adjustment.

    This is a problem more tricky than solving emissions from electricity generation.

    cheers,
    Christopher

  27. BilB
    August 1st, 2007 at 17:42 | #27

    Carbonsink,

    You draw some strange conclusions from your reading. Bio fuels are a happening thing and are now well underway, and your alternative energy generation conclusions are way out of the ballpark. But most curiously you seem to have missed the part where there is no option, unless thousands of scientists are wrong, but to go down the alternative energy path.

  28. August 1st, 2007 at 23:00 | #28

    Christopher and aidan:
    If there was a small reduction in road transport emissions (and the figures I’ve seen suggest it was nothing more than a temporary dip, nothing like 6%) it was more than offset by rapid growth in domestic aviation. Hence, emissions from the transport sector continue to grow in the face of escalating fuel prices.

    BilB:
    I don’t believe there is any option than to go down the alternative energy path. I don’t believe the scientists are wrong. However, I don’t believe this will be an easy or cheap transition.

    P.S. Biofuels are the new hydrogen. Its just a matter of time.

  29. mugwump
    August 1st, 2007 at 23:16 | #29

    If emissions prices increase steadily between now and 2050 people will make location decisions that reflect those prices, and demand for travel will decline accordingly, without anyone feeling much actual pain.

    That is what is up for debate: most people’s intuition is that the transition costs are non-zero, certainly a lot more than the 1%-3% implied by the steady-state analysis.

    My own gut says that 60% reductions by 2050 will involve an order of magnitude greater transition costs (10%-30%). But regardless of my gut (or anyone else’s), the debate won’t move forwards until the transition costs are also quantified.

  30. christopher
    August 2nd, 2007 at 11:27 | #30

    carbonsink – you can’t have it both ways – you specifically referrred to petrol prices and how you hadn’t seen much price responsiveness.

    John told you that the response takes time in the energy sector as a whole – your ability to change the energy consumption is limited because its energy consumption is pretty much fixed in the technologies you currently own.

    I told you the data showed very different consumer behavior for the past 5 years compared to any period previously. Ttake a look at the breakdown of consumption by industry by fueltype in the ‘F’ table at http://www.abareconomics.com/interactive/energy_july07/index.html.

    That is, we are beginning to see that long run response John referred to and which economists spend a lot of their time studying.

    Its true that energy consumption in the air transport sector is up (as it is in shipping) – but my speculation is that there are factors beyond just fuel prices going on there (falling real prices of tickets?).

    And biofuels are a great option if you can solve the cellulosic problem (which for thirty years, scientists have been saying…just another 10 years… although one admitted to me last year, he now thinks it may be another 20 years) and use algae for biodiesel production (or various oil/fat waste streams).

    Its not that because these are tough problems to crack that we shouldn’t try (and perhaps try harder – putting the subsidies to R&D rather than production of ethanol from inputs requiring a substitution away from food production), but we should acknowledge, there is no quick fix likely to emerge around the corner.

    Still, I’m not sure what your concern is- the point of JQ’s post was that the adjustment costs for appropriately dealing with climate change are not all that large (and expected to be smaller than the costs of not acting).

    Your reference to politicians and energy prices will be telling. A credible emissions trading scheme will have carbon bassed energy prices rising significantly – but over a moderately long horizon. Its all about setting the expectations correctly so you can make better choice when you’re next changing your energy consuming technologies.

    cheers,
    Christopher

  31. August 2nd, 2007 at 14:32 | #31

    Christopher,

    I would loved to be proved wrong. I really would. I’d like nothing better than see my fellow Australians ditch their gas-guzzling SUVs for ultra-efficient vehicles. Looking at the ABARE table there does seem to be a dip in petrol consumption (for road transport) in 2005-06, but this is more than offset by a rise in LPG consumption. Also, looking at the totals at the bottom diesel consumption (ADO) still seems to be rising.

    RE: biofuels:
    It never ceases to be amaze me how many people think “biofuels are a great option”. The greenhouse benefits of biofuels are debatable, the net energy return is negligible, and all that’s been achieved so far is destruction of rainforest in SE Asia (for palm oil plantations) and higher maize prices. Not to mention the fact that we’d need to double the size of the planet to both feed ourselves and grow our own fuel. Yes, cellulosic might work and so might algal biodiesel, but like nuclear fusion, it always seems to be 20 years away. The biofuels bandwagon is in many ways just as problematic as the hydrogen bandwagon, both of which have been enthusiastically endorsed by George W. Bush … never a good sign :)

    Still, I’m not sure what your concern is- the point of JQ’s post…

    My concern is the costs will be much higher than JQ believes, politicians will accept the ‘one percent’ numbers and try to get away will minimal action. This will lead to more draconian measures 20-30 years from now.

    Your reference to politicians and energy prices will be telling.

    Do you honestly believe a government of either political flavour will inflict higher energy prices on the electorate within 5-10 years?

  32. christopher
    August 2nd, 2007 at 16:51 | #32

    carbonsin – I already noted the substitution away from petrol to LPG – but we were discussing total energy consumption in road transport – and it has declined. Not increased as you try to state.

    regarding biofuels, please reread what I said – I pointed out that subsidising biofuel production from food based products was not a good idea.

    JQ’s asked for a demonstration that the costs are higher than economists think they will be (and he appears willing to concede up to around 3 per cent for Australia) – please do it with numbers rather than speculation.

    I indicated what a credible policy response would be – relatively high carbon prices in the medium term. The price path for carbon will have to be stated in pretty short order and both political parties have processes underway to idenitfy that price path.

    Not sure why you think we need significantly higher prices in the next 5-10 years. A theme through this discussion has been the need to accomodate the long time frames associated with capital replacement in energy consumption. If you are looking for radical change in 5-10 years, the costs will be large – but you don’t appear to be wanting that large cost. And no serious economist thinks that time frame is an effective way to deal with climate change.

    cheers,
    Christopher

  33. August 2nd, 2007 at 18:09 | #33

    we were discussing total energy consumption in road transport – and it has declined. Not increased as you try to state

    It may have declined slightly recently, but total energy consumption for road transport is still up 7% (953.6 to 1020.6) since 2001 which is the period of increasing fuel prices we have been discussing. Also, total diesel consumption across the economy (row 756) still seems to be increasing, as is aviation fuel.

    JQ’s asked for a demonstration that the costs are higher than economists think they will be (and he appears willing to concede up to around 3 per cent for Australia) – please do it with numbers rather than speculation please do it with numbers rather than speculation.

    Ok, here’s a number. JQ made a worst-case scenario calculation where 60 percent of electricity generation was replaced with solar PV and came up with a cost of 3 percent of GDP. I tried to make the point that you can’t replace X megawatts of coal with X megawatts of solar PV (or other renewables). You in fact need 3-4X megawatts of renewables and an upgraded grid infrastructure due to intermittent nature of most renewable sources.

    JQ also makes the point that most of the savings will come from conservation, but I fail to see how that conservation will come about because a) the elasticity of demand is very low (e.g. a 50% rise in fuel taxes over 6 years has result in very little conservation) and b) no politician is going to raise energy prices to the point that consumers feel pain and start conserving.

    Not sure why you think we need significantly higher prices in the next 5-10 years

    Because the climate scientists are telling us that early action will be far more effective than delayed action. The economy may be able to better cope with action spread over longer time frames, but the atmosphere needs action in the short term.

  34. SimonJM
    August 2nd, 2007 at 18:52 | #34

    Does anyone hear know much about the Brazilian Proposal?

  35. SimonJM
    August 2nd, 2007 at 18:53 | #35

    I wish there was an edit button.

  36. Hermit
    August 2nd, 2007 at 22:09 | #36

    Pr Q
    The disparity between energy’s factor cost to GDP of 5-7% and its ‘contribution’ of 50% is discussed on p4 of the report http://www.cse.csiro.au/publications/2002/futuredilemmas5.pdf
    citing a study by Kummel and Lundberger. This seems to say energy has a highly nonlinear effect on the economy, or that maybe CSIRO is even more hardline on this than ABARE.

  37. BilB
    August 3rd, 2007 at 04:53 | #37

    Carbonsink,

    For goodness sake, stop reading, it is not doing you any good. Go skiing (while you can) and cool off.

    Solar PV (photo voltaics) are not the front runner in the alternative formula because of cost and the less convenient storage methods ( the vanadium redox battery being the preferred). If the production problems can be sorted out for the multi spectrum PV’s, which offer energy conversion effiencies of 50%, then they will become the power source of choice, but no one is holding their breath.

    At this stage the solution for mass power generation is a combination of Concentrating Solar Thermal (2 billion dollars per gigawatt all up cost for the hybride system which provides the full baseload solution [European costings]) and Geothermal. There is no need for a trans continental grid connection as the sun’s energy falls on all parts of Australia.

    Your statements on the energy benefits of ethanol are just plain wrong. They can only have credibility if you focus on the absolutely worste production model. This seems to be your forte. The arguments about the loss of forests are also falacious. True, virgin land is being converted to energy production and there is a loss of greenery. But note this greenery is a once loss and relevent to ecosystems rather than carbon issues. From a carbon point of view the greenery for energy harvesting goes into an annually renewed carbon recovery cycle. Natural greenery does little for carbon capture in the long run unless fallen vegetation is trapped in sediments and does not decompose, as the Europeans are finding out.

    SimonJM

    What was the Brazillian Question?

  38. August 3rd, 2007 at 07:52 | #38

    BillB – “There is no need for a trans continental grid connection as the sun’s energy falls on all parts of Australia.”

    Yes that is true but not at the same time. Also the areas that a trans Australian HVDC feeder would pass through is has an average of 8 to 10 sun hours per day much more that areas such as Melbourne or Sydney.

    “Your statements on the energy benefits of ethanol are just plain wrong.”

    I support Carbonsink’s view on ethanol. There is large scale destruction of greenery for fuel not to mention the easy option that will be used of turning food into fuel. Even if we turned all the arable land into fuel production and did not eat we still would not be able to produce enough ethanol. Using marginal land does not really help as cropping these areas will deplete the already fragile soils and will require fertilising after a few seasons.

  39. BilB
    August 3rd, 2007 at 09:20 | #39

    Ender,
    You are under informed on the ethanol thing. Quensland farmers are getting per hectare ethanol yields of 9500 to 12500 litres and that is with out the cellulose component. With the cellulose method that is now being proved by Dedini in Brazil those yields will reach 20,000 litres per hectare. Is it profitable? Yes, and that is the test. Farmers of cane for ethanol are getting twice as much for their crop as are farmers for sugar production. All od the vehicles and production plant can run on the fuel produced with no requirement for diesel fuel , so the process is can be fully closed with huge net energy yields. Carbonsink cannot get his mind past corn and grain ethanol. Australia to be E85 needs 1 million hectares, and the land is there with minimal loss of food cropping land.

    The trans continental thing would be useful but it is not essential.

    To replace all of Australia’s electricity production CSP and geothermal, 35 gigawatts or there abouts (half of which is in desperate need of replacement), will cost around 100 billion dollars. This a tiny impost on a trillion dollar economy remembering that this is an economic earning asset that will pay its way on its own.

  40. christopher
    August 3rd, 2007 at 10:08 | #40

    It may have declined slightly recently, but total energy consumption for road transport is still up 7% (953.6 to 1020.6) since 2001 which is the period of increasing fuel prices we have been discussing.

    Yup – but I already said the peak was in 2003-04 – and the deline was slight.

    And I also indicated that consumption behavior since 2001 is different from any other period.

    Finally, with a long term elasticity of 0.8 (or 1), then consumption, over the long term, will decline some 40 (to 50) per cent if prices remain at their current levels. Of course, that statement ignores population and modest income effects (which offset, and eventually overcome the price effects – but see my comments earlier on that)

    The other thing to think about is what is the ‘long term’ that economists refer to – it means the time taken to replace capital stock. Which for energy ranges from 10-15 years for cars to 20-30 for industrial processes to 40-50 for power stations.

    This adjustment process is a long term process.

    As others have noted, JQ used the most expensive technology for his estimates (at current estimates of $250/MW) to serve as an upper bound. PV won’t be used unless its costs come down. Whilst I’m sceptical, PV boosters are hoping for a 50 per cent decline in those costs over the next 10-20 years.

    And whilst some more capacity is needed, its not a lot more for PV – given the costs JQ used, I don’t see the need to compensate with increased capacity requirements. As a professional energy economist (although Cartman may have something to say about that statement), the estimate appears to me as a reasonable upper bound on costs.

    Because the climate scientists are telling us that early action will be far more effective than delayed action

    I think that statement is putting words in the mouths of scientists. Or rather, they’d like early action, but economists have something to say about the adjustment process too – and particuarly its rate.

    The adjustments process that’s desirable is oen that means we spend as much as required to solve the problem – but no more. And starting now is good – but the adjustments early on will only be small – the main target is the 550ppm by later this decade (or lower if possible).

    But again, the target is informed by both science and economics.

    cheers,
    Christopher

  41. August 3rd, 2007 at 10:39 | #41

    I think that statement is putting words in the mouths of scientists.

    Hmmm. I’m sure James we-have-to-shut-down-all-the-coal-fired-power-stations-tomorrow Hansen would beg to differ.

    Let me try and lay out my argument in point form:

    1. The climate scientists tell us urgent action to reduce emissions is required early. Any peak or plateau in oil production will add to the urgency in the transport sector.

    2. The costs of reducing emissions will be larger than the 1-3 percent of GDP suggested by JQ and others, because we are not replacing like-for-like. Solar, wind, and other renewables are not as reliable as fossil electricity and will require significant over-capacity and investment in new infrastructure maintain the current consistency of supply. Similarly, we have no like-for-like replacement for crude oil. The energy return for all the alternatives is much poorer, and there are problems with all the alternatives (biofuels, CTL, GTL, oil sands, shale etc). With biofuels is largely lack of land and competition with food, and with the others its increased GHG emissions.

    3. The political class knows, or at least fears, the economic pain reducing energy use will be significant, and they will delay real action (i.e. raising energy taxes) as long as they possibly can. The politicians will do their best to be seen to be doing something (signing Kyoto, emissions trading, susbsidies for solar hot water etc) but there will be very little real action, and there will be no significant drop in emissions.

    A final question. If solving the problem really was as painless as 1-3 percent of GDP, why are we doing so little, and why are our politicians so reluctant to act? Is Howard in cahoots with the fossil-fuel industry to such an extent that he would deliberately sabotage our kids future just to please his mates? I find that hard to believe, even of JWH. I think its because he’s scared rigid about raising energy prices.

  42. SimonJM
    August 3rd, 2007 at 10:48 | #42

    The Brazilian proposal is an idea that every nation’s target in reducing emissions should be in proportion to how much they are to blame for the warming we’ve had.

    http://www.abc.net.au/rn/scienceshow/stories/2007/1977876.htm#transcript

    A couple of weeks before that I sent a question to a blog asking if it were possible to calculate the economic benefit by the developed nations both by using fossil fuels and for using the atmosphere as a free dump. If we use the figure given by the IPCC at what level we should stabilize CO2 to avoid the worst of climate change you should be able -given the above- to work out if we give all nations equal shares to pollute to this level how much the developed nations owe developing nations for having used up their pollution allocations.

    Again as I’ve said before it is pointless getting our own act together if we don’t finance the developing nations doing the same.

    BTW that piece maily deals with a study of climate sceptics that should be of interest

  43. August 3rd, 2007 at 10:52 | #43

    BilB,

    Frankly you are in la la land on ethanol and biofuels generally. I focus on the “absolutely worst production model” (i.e. maize ethanol) because that is the production model being heavily promoted in the world’s largest oil consuming nation. How can I focus on cellulosic ethanol when the technology is not used on a large scale anywhere in the world, or sugarcane ethanol when its obvious that only a very small percentage of the world’s arable land is suitable for sugarcane?

    You might be able to fudge the numbers and make Australia sound like it could replace all of its petrol with locally grown ethanol by doubling our sugarcane production, devoting it all to ethanol production, planting out the entire Ord River and TNQ, doubling the likely yields while conveniently fogetting that ethanol has two-thirds the energy content of petrol. However Australia is very different to most developed countries. We have a small population with a relatively large amount of land suitable for sugarcane. You cannot hope to reproduce the same ethanol self-sufficiency for the U.S., Europe, Japan or China.

    But note this greenery is a once loss and relevent to ecosystems rather than carbon issues

    Mate, I don’t know about you, but a “once loss” of tropical rainforests is pretty damn important to me. To quote Monbiot…

    The most destructive crop on earth is no solution to the energy crisis

    In September, Friends of the Earth published a report about the impact of palm oil production. “Between 1985 and 2000,” it found, “the development of oil-palm plantations was responsible for an estimated 87 per cent of deforestation in Malaysia”. In Sumatra and Borneo, some 4 million hectares of forest have been converted to palm farms. Now a further 6 million hectares are scheduled for clearance in Malaysia, and 16.5 million in Indonesia.

    Before oil palms, which are small and scrubby, are planted, vast forest trees, containing a much greater store of carbon, must be felled and burnt. Having used up the drier lands, the plantations are moving into the swamp forests, which grow on peat. When they’ve cut the trees, the planters drain the ground. As the peat dries it oxidises, releasing even more carbon dioxide than the trees.

    Horrifying! Biofuels produced on a large scale are complete and utter madness!

  44. August 3rd, 2007 at 12:32 | #44

    BillB – “Quensland farmers are getting per hectare ethanol yields of 9500 to 12500 litres and that is with out the cellulose component. With the cellulose method that is now being proved by Dedini in Brazil those yields will reach 20,000 litres per hectare”

    Fuel used 2002 26 400 000 000 litres
    Energy in 1 l petrol 9.5 KWHrs/litre
    Energy in 1 l Ethanol 6.5 KWHrs/litre
    Energy in Fuel Use 250800.00 GWHrs
    Equivalent ethanol required 38 584 615 385 litres

    worst case is 9500l per hectare = 4 061 538 hectares

    “The total area of sugar cane cut for crushing in 2005-06 was 406,000 hectares. Queensland was the main growing state (384,000 hectares). The total quantity of sugar cane crushed in 2005-06 was 38.0 million tonnes. In Queensland 35.3 million tonnes were crushed.”

    So to supply Australia’s fuel demand in 2002 with sugar cane we would have to expand the sugar industry 10 times its present size and stop exporting sugar and using it ourselves. Is there 10 times the present area suitable for sugar cane? Cellulostic ethanol has yet to be proven on any large scale. Even assuming that we could expand the industry using the fuel produced to power the machinery reduces the yield per hectare so even more land would have to be cultivated. Quite apart from this we would need to find 10 times more fertiliser, 10 times more pesticides, 10 times more machinery for cultivation etc.

    Ethanol is not a silver bullet. At best it can be used to power the hopefully small number of PHEVs that have to have a range greater than 300km and can not do without it.

  45. christopher
    August 3rd, 2007 at 12:38 | #45

    James we-have-to-shut-down-all-the-coal-fired-power-stations-tomorrow Hansen would beg to differ

    I wasn’t aware we were playing the game of pin the tail on the donkey – should I quote back equally specious statements from economists or scientists who say we should do nothing?

    Isn’t the consensus target no more than 550pmm by around the middle of this century.

    Any peak or plateau in oil production will add to the urgency in the transport sector.

    If you believe we are at a a oil peak/plateau, than that can only be a good thing can’t it? Less oil to burn? Increased costs, more energy conservation by consumers.

    Those big clunky imperfect models used to model the economic adjustments to climate change do take account of the capacity factor differences between generating technologies. And yes, the additional capacity will cost more, that’s part of why it’s a GDP hit – but you haven’t got a leg to stand on if that’s your critique of the modelling.

    I’ll pass over the speculation on political behavior, but it does take us to your ‘if it’s such a tiny hit’ point.

    Whilst 1-3% might look small – and while it’s all relative, it does ignore a couple of things. First, it measures only the hit on the production side – completely ignoring the loss in welfare/wellbeing felt by consumers. This might be large (see Mugwump’s point above)

    Secondly, it’s in the context of the time take to do the adjustment (to hit the appropriate target in the appropriate timeframe)

    If it emerges that the appropriate target is larger or earlier, then the costs will be larger

    If your claim boils down to wanting a lower target, or you want it done sooner, then your claim that it will cost more is correct.

    But then perhaps you have to justify why the target and timeframe are inappropriate relative to the currently accepted requirements.

    cheers,
    Christopher

  46. August 3rd, 2007 at 13:59 | #46

    Christopher wrote:

    should I quote back equally specious statements from economists or scientists who say we should do nothing?

    Well you could, but do climate change denialists really have the same level of credibility as James Hansen?

    If you believe we are at a oil peak/plateau, than that can only be a good thing can’t it? Less oil to burn?

    Good in some ways, in that there will inevitably be some conservation with very high oil prices, but bad in others, because we will inevitably turn to greenhouse-intensive alternatives (CTL, oil sands, shale etc) to maintain our oil addiction.

    Those big clunky imperfect models used to model the economic adjustments to climate change do take account of the capacity factor differences between generating technologies.

    Do they? JQ said “I will deal with quibbles about supply variability in comments if desired”, but I didn’t see where he did that, and I didn’t see where he said these supply variablity costs were factored in.

    BilB:
    What Ender said!

  47. BilB
    August 3rd, 2007 at 14:10 | #47

    Ender,

    That is all good information, but let’s go through it. Firstly we are working towards E85 (85% ethanol and 15% petrol) so assuming your figure of 26 billion litres of petrol is correct then we are looking for 22 billion litres to make up the E85 (ignoring the lower energy content for the moment) and I am happy to accept your cultivated area of 384,000 hectares for Queensland. Add to that the Ord River stage 2 with 440,000 and you have 824,000 and perhaps another 100,000 hectares for NSW and your have 924,000 hectares. Now that is land already assigned (largely) for sugar cane, and it is all land able to deliver the high end yields. This is the state of the play on cellulose:
    http://www.bloomberg.com/apps/news?pid=20601086&sid=aUTd.VlahRuc&refer=news
    …with this capability in place then the per hectare yields of 20,000 litres per hectare will produce 18.5 billion litres which derated for its lower energy will yield 13.8 billion litres. This is sufficient for E50 and a very good result for the loss of some banana and pineapple production.

    This is very close to a 60% reduction for the automotive fleet and we have not torn up the country, we haven’t needed ten times the available arable land. And this is just from cane production before algal fuels (which are problematic) is considered. E2 is now mandated for 3 states and that is a good start. You can play the “it will never happen” and “the worst case looks so bad so let’s do nothing” games if you wnat to but the only on listening is John Howard,… and perhaps Carbonsink (but he does mostly talking and not much listening). Time frame to E50, probalbly 15 years.

    Carbonsink,

    I have spoken personally with the farmers and what I have said here is what they are planning. They are not happy growing sugar to feed into a world sugar glut at cost when they can be earning twice that producing energy. I know who’s word I am going to take. I am fond of rain forests too, but the reality is that those forests are going to die if the global temperatures reach predictions. If that happens, what have you saved. You will be standing of the green grassy slopes of Antactica looking out at a parched world wondering what might have been. As for every other country in the world? Well you will find that most of them have half or less of the emissions of Australia, and they have there own good minds working out what is right for them. Their problem is not our concern unless we can earn income from being involved. We here, in Australia, are in a catch up game, and we have a long way to go.

    But all of that aside i am not clear on what your total solution is. Please elaborate.

  48. August 3rd, 2007 at 16:09 | #48

    BillB – “with this capability in place then the per hectare yields of 20,000 litres per hectare will produce 18.5 billion litres which derated for its lower energy will yield 13.8 billion litres. This is sufficient for E50 and a very good result for the loss of some banana and pineapple production.”

    Yes assuming that the current vapourware of cellulostic ethanol comes true and assuming that no-one wants to eat bananas or pineapples AND you are only getting to E50. Where does the other 50% come from??? Also assuming that the areas can still grow sugar cane now still can in 20 years and assuming that we only consume petrol at the rate we did in 2002 for the next 15 years. Also assuming the Ord river expansion which could be an environmental disaster goes ahead.

    If nothing else convinces you that ethanol is a farm subsidy then this set of huge assumptions that are required to reach E50 should. We need to move completely off fossil fuels for transport not convince people to remain driving Prados with the fairy tail promises of ethanol. An again as carbonsink pointed out Australia is a very special case with a large land surface and small population. There are not many countries in the world that can grow enough fuel.

  49. BilB
    August 3rd, 2007 at 17:22 | #49

    Ender,

    Cars and small planes run best on the E85, we are after 35% more. Australia is 768 million hectares. I imagine that there is another .5 million hectares suitable there somewhere. Now there is a surprise, did you know that Brazil is larger than Australia? But it supports 10 times the population of Australia, and the people there have a carbon emission of 2 to Australia’s 18 per person, because of their ethanol production which goes back 25 years.

    Where are you coming from? Ethanol is not a farm subsidy at all. It is fully commercial.

    I will put it to you Ender, what is your Australian carbon reduction package. Lay it out, demonstrate that there is substance in your thinking.

  50. August 3rd, 2007 at 19:56 | #50

    BillB – “Australia is 768 million hectares. I imagine that there is another .5 million hectares suitable there somewhere. Now there is a surprise, did you know that Brazil is larger than Australia?”

    No its not a surprise at all. Brazil is a huge country with vastly more arable land than Australia, better and deeper soils and vastly more rainfall. Almost as different a country as you can imagine. Now despite its ethanol productions Brazil is:

    “On the other hand, Brazil is now the 9th greatest oil consumer (accounting for about 2.6% of the world’s annual oil consumption) and its annual consumption has increased by about one-third over the past decade. Brazil now imports about 13% of the petroleum it consumes, with Africa, the Middle East, Argentina, and Venezuela being its main sources, but hopes to increase its own oil production such that self-sufficiency can be achieved before the end of the decade”
    http://www.cslforum.org/brazil.htm

    Despite ploughing irreplaceable rainforest Brazil is nowhere near cutting its dependancy on oil – only imported oil as it ramps up domestic production.

    I have set out what I see as the transport fuel of the future and it is electricity. It is already produced and is reticulated to almost every house and business in Australia. It is safe and easily stored and can be generated from renewable resources without damaging them.

  51. August 3rd, 2007 at 21:39 | #51

    BilB wrote:

    But all of that aside i am not clear on what your total solution is. Please elaborate

    My solution? A big income-to-carbon tax switch. i.e. Introduce a carbon tax in return for income tax cuts. I’m talking about an overhaul of the tax system that would make Costello’s new tax system look like tinkering at the edges. The entire tax system would be focussed on reducing carbon emissions. In fact, why not scrap the GST as well and fold it into the carbon tax. After all, why should you pay GST a solar panel?

    The carbon tax would start at a few dollars a tonne but ramp up quickly, and keep rising every year until we stabilise CO2 in the atmosphere. Obviously there would be equity issues with energy taxes hitting low income earners hardest, but hopefully everyone could be adequately compensated.

    I’d sweep away all the rebates, subsidies, low-interest loans and other incentives to reduce emissions and just tax the crap out of carbon. Not only that, energy consumers would know that the carbon tax would keep rising indefinitely. If that doesn’t drive conservation and investment into low-emission energy technologies I don’t know what will.

    Now if you’re asking what my technological solution would be, I wouldn’t dictate one, I’d leave it to the market. If I were to guess at what the best low-carbon solution for personal road transport would be, it would be battery electric vehicles. The greenhouse benefits of biofuels are dubious at best, downright catastrophic at worst. In a world with a high price on carbon BEVs would win hands down because (hopefully) proper carbon accounting would price biofuels out of the market, but mainly because the well-to-wheel efficiency of BEVs is vastly better than any ICE.

    Of course, I realise this plan is totally impractical and politically impossible. What will actually happen is more handouts, rebates, subsidies and handwringing about climate change before elections. We might see emissions trading get up around 2012, but naturally the fossil-fuel lobbyists will ensure that allocations are overly generous and it will make absolutely no difference to overall emissions.

    You think I’m overly cynical? You just watch.

  52. sillytree
    August 4th, 2007 at 10:15 | #52

    Cleaner burning fuels, more efficient engines and direct taxes on excessively polluting industries with the revenue being spent directly to mitigate the polluting activity is the way to go.

    We do not have a fossil fuel shortage so lets not confuse this debate by drawing conclusions to solving pollution & carbon emmission issues on the assumption that we do.

    Certain countries already have very high average mileage rates for their automobiles, which Australia can emulate. Mandate newer cars by taxing older less efficient cars annually. People will trade them in. Government will have increased revenue for maintaing roads and bridge infrastructure. Sam idea with trucks.

    And lets plant some more trees before we tell our farmers to grow more crops to produce ethanol. Start with Wilson’s Prom. I won’t be around in 1000 years when that place finally gets back its old beauty by waiting for Mother Nature.

  53. August 4th, 2007 at 11:12 | #53

    Sillytree – “We do not have a fossil fuel shortage so lets not confuse this debate by drawing conclusions to solving pollution & carbon emmission issues on the assumption that we do.”

    So how do you come to this conclusion that we have no fossil fuel shortage? We don’t right at the moment however this is not going to last.

  54. BilB
    August 4th, 2007 at 12:19 | #54

    Carbonsink,

    Well that makes it clear. I think that you are totally unrealistic if you think that the Australian public are going to just drop their $200 billion investment in their existing vehicles and buy an electric vehicle even if they were available and if there was sufficient electricity to power them. You seem to want to block out the thirty year period that it would take to make such a transition. And that makes it clear as to what you issue with bio fuels is. It annoys you intensely that there is an option to fossil fuels, so you feel a need to make it as bad as possible.

    I understand. I have the same intense dislike for Fission Nuclear Power because I can clearly see the pitfalls. The other flaw in your logic is that you seem to believe that the “market” will automatically deliver the optimum end result. Well by giving the market a clear constraint with with an agressive carbon tax you have improved the chances of that happening. But I suggest that the market which created the existing GW problem is unpredictable and could well give an unforeseen result.

    Ender,

    I have to agree that electric vehicles are the future. The issue is how to get there. You do not appear to have a vision of how that might happen.

    On Brazil. That sounds terrible that they should be the world’s eigth largest oil consumer (2006). That 185 million people (versus US 300 million people) are being totally irresponsible you might think. It turns out that they use one tenth of the oil that the US uses despite having two thirds of the population of the US. Each Brazillian releases 2 tonnes of CO2 compared to each US American at 20 tonnes and each Australian at 18 tonnes. And how dare they cut down their forrests we cut down most of ours and cannot wait to get rid of the rest, but how dare they. And I think that I can see a couple of Indonesian fingers, even from here.

  55. derrida derider
    August 4th, 2007 at 18:23 | #55

    Yep, done properly greenhouse policy should cost buggerall in terms of material welfare precisely because capitalism is incredibly adaptable and innovative. And, yep, it would have cost even less if the energy lobby’s tools and fools hadn’t delayed things. As I’ve said before I hope that these peoples’ children piss on their graves (assuming the graves are not underwater).

    But I’m extremely pessimistic that any serious action will be done in time to avert catastrophe because it requires large scale collective action. The temptation to defect from a one-shot prisoners dilemma with hundreds of nations as players is just too strong – such defection, will, of course, be covered by a barrage of “look over there” mutual finger-pointing.

  56. August 4th, 2007 at 22:43 | #56

    BilB wrote:

    I think that you are totally unrealistic if you think that the Australian public are going to just drop their $200 billion investment in their existing vehicles and buy an electric vehicle even if they were available and if there was sufficient electricity to power them.

    Yes its a monumental challenge. I’ve been arguing all along that the transitition to a clean energy future will be very costly and extremely difficult politically. However, I don’t think a transition to BEVs will necessarily be harder than a transition to biofuels.

    A few points:
    1. The $200 billion car fleet will completely turn over in 10-15 years anyway. So the Australian public will spend the money on new cars anyway.
    2. There definitely isn’t sufficient electricity (clean or otherwise) to power a substantial fleet of electric vehicles, but there isn’t sufficient supply of biofuels either.
    3. BEVs are no longer science fiction. Hybrids are here now. PHEVs are not far away. BEVs will follow soon after. We could make the transition in 10-15 years carbon was priced correctly.

    What will take longer, planting out a million hectares with sugarcane, or building a million electric cars?

    It annoys you intensely that there is an option to fossil fuels, so you feel a need to make it as bad as possible.

    Huh?! Where on earth do you get these ideas? Look, I was big believer in biofuels about 18 months ago, but the more I read, the more I realised that its not viable solution and will probably do more harm than good. I fought against it for a long time, but in the end I realised its madness to turn the planet into monoculture and force millions into starvation just so we can keep driving internal combustion vehicles.

    The reality is biofuels will probably play a small role in the near term, primarily as blends with fossil fuels. They are a good short term ‘fix’ because (as you say) they can be used with the existing vehicle fleet. However, biofuels can never and will never supply the world’s entire liquid fuel needs. Other solutions will have to be found.

    But I suggest that the market which created the existing GW problem is unpredictable and could well give an unforeseen result.

    Yes the market economy has done lots of harm. Yes climate change is the greatest market failure the world has seen. But the market has also delivered untold wealth to western economies, and is in the process of doing the same in China. The market is still our best tool for tackling climate change. Its certainly better than the agrarian socialism which you and the Queensland Nationals seem to favour!

    If we price carbon correctly, and do the carbon accounting correctly, the most efficient solution will emerge. You can invest in a biofuels company, and I can invest in a electric vehicle company. Let the market decide who is right.

  57. August 5th, 2007 at 12:04 | #57

    carbonsink – “2. There definitely isn’t sufficient electricity (clean or otherwise) to power a substantial fleet of electric vehicles, but there isn’t sufficient supply of biofuels either.”

    Agree with everything that you say except this point. There is actually quite sufficient electricity as most of it sits idle overnight and most charging can be done in off peak hours. The actual increase in capacity needed is quite small.

    Also we need to stop thinking of BEVs and PHEVs a being a problem to charge. On of the greatest barriers to high renewable usage is storage. BEVS and PHEVs with their large battery packs can be part of the solution not a problem to solve. Vehicle to Grid (V2G), also not science fiction, can use the battery packs of BEVs to store gigawatts of electricity in systems that the utilities do not have to pay for, only lease. New batteries from AltairNano, in production now, have a cycle life of 15 000 cycles and a charge time of 10 minutes.

    The beauty of V2G is that utilities do not have to buy the storage and we do not have millions of batteries sitting around in warehouses doing nothing. We can drive the batteries, mitigating the oil problem, and the utilities can use the batteries solving the storage problem.

  58. August 5th, 2007 at 18:47 | #58

    There is actually quite sufficient electricity as most of it sits idle overnight and most charging can be done in off peak hours.

    Ok, but most of that off-peak electricity is currently supplied by coal-fired power stations which I’m sure we’re all agreed should be phased out ASAP. It seems to me you’d most likely want to recharge your BEV/PHEV at night, which is not a good time for solar or coastal sea breezes.

    BTW, has ProfQ ever discussed carbon rationing and tradeable energy quotas here? Its an idea than Monbiot seems to have embraced. Thoughts anyone?

  59. August 6th, 2007 at 09:36 | #59

    carbonsink – “Ok, but most of that off-peak electricity is currently supplied by coal-fired power stations which I’m sure we’re all agreed should be phased out ASAP.”

    Yes true enough. There will always be off-peak times when cars can be charged however as renewables are more attuned to the cycles of peak and off-peak this will diminish. Perhaps as the percentage of BEVs and PHEVs grows and they leverage more and more renewables they will charge at different times to now.

  60. August 6th, 2007 at 11:11 | #60

    as renewables are more attuned to the cycles of peak and off-peak this will diminish

    Some are and some are not. Hot Dry Rock geothermal technology will presumably pump out electricity as readily at 1am as at 1pm. Likewise with Hydro electricity. Given that geothermal is cheaper than solar (or in the case of Hot Dry Rock is projected to be cheaper) it does not seem clear that the future necessarily belongs to solar or wind generators.

    Where off peak charging of plug-in hybrid cars may be helpful is in providing better overall utilization and return on investment for power transmission infrastructure. However with battery costs still being hugely uneconomical for plug-in hybrid electric cars it is an idea whos time has not yet arrived.

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