AARES

February 7th, 2008

I’ve been at the annual conference of the Australian Agricultural and Resource Economics Society for the last few days. I’ve been coming to these for nearly 30 years, and it’s always good to catch up with old friends and colleagues. For many, it’s the first time they’ve seen me without a beard, and quite a few failed to recognise me until I accosted them.

The big change in 30 years has been the rise of environmental and resource concerns at the expense of old-style agricultural economics. Most of my early papers dealt with now vanished policies like the wool price stabilisation scheme, and the analysis of production systems needed to inform such policies. Now the conference has continuous sessions on both water and climate change, and only a handful of papers on production economics.

Ross Garnaut spoke on Tuesday and his talk was pretty sobering. Short version – as regards the likely consequences of business as usual, Stern was an optimist. Unless the world acts decisively, and well before 2020, we’ll have emissions higher than the highest of the IPCC scenarios Stern looked at. What’s worse new information on feedbacks suggests that the models relating emissions to temperature change are also likely to be on the conservative side, as the capacity of sinks to absorb emissions declines.

The positive side of this, I guess, is that the problems arise from China (and to a lesser extent India) growing fast, and that means China has more resources to address the problem, if we can only get the politics right.

One aspect of the latter is the near-certainty that we won’t be able to get away much longer with the notion of historical rights for high-emission countries like the US and Australia. By 2050, under any plausible agreement, we’ll have uniform emission entitlements per person, for everyone in the world, at a level well below our current emissions.

Categories: Economics - General, Environment Tags:
  1. wilful
    February 7th, 2008 at 11:51 | #1

    It seems to me that the end point, be it 2050 or whenever, will have to be a per capita/personal emissions entitlement. That’s the only pragmatic and philosophically just solution. So we need to get approximately some idea of how many tonnes that is per person, and start immediately towards that track, with strong interim targets to ensure compliance. Beyond that, let human inguenity and the marketplace rule.

    I don’t know if the final total for a chinese or indian person will be above or below current emissions, but they will have to rise for the next decade or two before coming back down.

    The other problem with personal emissions targets is human population. Will having a large and growing population give competitive advantage and can we provide benefits for a smaller pop?

  2. wizofaus
    February 7th, 2008 at 13:22 | #2

    Indeed, I don’t think per-capita emissions entitlements could work at all, just from a purely pratical point of view of measurement and inforcement.

    Why not simply take the population of every current nation, and allocate a per-country entitlement accordingly? Individual countries can then work out whatever means they like, whether it’s by growing their population but rapidly lowering per-capita emissions, or by lowering their populations and not worrying too much about per-capita emissions.

    The number of nations isn’t likely to change much between now and 2050 after all. The total number of people is guaranteed to change dramatically.

  3. jquiggin
    February 7th, 2008 at 14:30 | #3

    #2 It’s hard for Australia to push this line, since we used population growth as one of the reasons we should be given a soft target at Kyoto.

  4. February 7th, 2008 at 15:06 | #4

    One aspect of the latter is the near-certainty that we won’t be able to get away much longer with the notion of historical rights for high-emission countries like the US and Australia.

    If some technology for making electricity comes along that is cheap and entails no significant CO2 emissions and if electric cars in one form or another take off then such a scheme would be silly. If something must be done about CO2 then put a price on carbon (uniform globally if you must) via a shift in tax policy and then let the innovators come up with clever technological ways to avoid the tax.

    If CO2 emissions are a very serious problem and if nobody can come up with alternate technologies then we are up the sh!t anyway.

    Personally I expect rising oil prices to rationalise a move to plug-in electric cars. I then expect batteries to get cheaper and a whole lot better and for such cars to become mainstream. To be sure it may be regulation in one market (California) that drives this to some extent but we don’t need global regulation to make it a global phenomena.

    If given a chance I think nuclear will become more widespread. However other ways of making electricity such as geothermal technology (eg hot dry rock), solar thermal (eg solar towers and solar funnels), biohydrogen produced by genetically modified algae and other innovative technologies can all potentially drive down the production price of electricity to the point where these technologies are viable in their own right.

    I’m a technological optimist. I could be wrong buy I don’t think that in 50 years time we need to be rationing CO2 emission rights. Even if we need to tax emissions now I don’t think that we will need to in 50 years time.

  5. Peter Wood
    February 7th, 2008 at 15:39 | #5

    The is a nice short paper in Science magazine advocating uniform emissions entitlements per person: Baer et al. “Climate Change: Equity and Greenhouse Gas Responsibility” Science (29 September 2000) Vol. 289. no. 5488, p. 2287. Its probably behind a paywall though, darn those paywalls…

    I hope Garnaut puts his talk on the web, the “Will Climate Change end the Platinum Age” talk at ANU was quite good.

    A recent report by David Spratt and Philip Sutton (http://www.climatecodered.net/) also suggests that Stern was an optimist, and that feedbacks add an extra degree of risk. The first feedback – loss of albedo from arctic sea ice, already seems to be happening.

    I have recently been studying Weitzman’s preprint (available from http://www.economics.harvard.edu/faculty/weitzman/papers_weitzman) “On Modeling and Interpreting the Economics of Catastrophic Climate Change”, which is somewhat sobering reading. This paper can be thought of as arguing that risks of low probability, high damage (potentially catastrophic) effects are so high that their impact on climate change costs is much greater than any other impact.

    As an example of the low probability high damage effects, estimates of climate sensitvity have “long tails” in the direction of high temperatures, and on average there is something like a 1% chance that climate sensitivity (without taking into account slow feedbacks) is greater than 10 degrees, having potentially catastrophic consequences. Weitzman arrives at a ballpark estimate that when “slow” feedbacks are taken into account, this suggests a likelihood of 1% that there will be a greater than 20 degree temperature rise. The issue however is not specific probabilities of particular extreme events, but that there is a “fat tail” of low probability extreme events, that arises because of uncertainty. Weitzman includes a proof of what he describes as a “Dismal Theorem” which implies that when risk aversion and uncertainty are taken into account the only way that costs of climate change can be finite in cost benefit analysis is by introducing a very big parameter based on “something like the value of statistical life on earth as we know it, or perhaps the value of statistical civilization as we know it”, which Weitzman calls a “VSL parameter”. This parameter dominates the analysis much more than discounting.

    It is open to interpretation what policy implications this has but it seems to me that that choosing any emissions reduction target for Australia (be it a conservative one like 20% by 2020 or 60% by 2050, or a less conservative one like 40% by 2020) involves implicitly making an assumption about Weitzman’s “VSL Parameter”. This suggests to me that it may be more appropriate to think of our current situation as an “overshooting scenario”, with any level of emissions reductions paying off in terms of reduced catastrophic risk. The choice of a target then becomes a political economy problem.

  6. February 7th, 2008 at 15:53 | #6

    i suppose it’s a waste of time to mention that growing population will negate any plan to reduce greenhouse emissions. is this fundamental element of planning not mentioned out of fear? or does “she’ll be right, mate” play a role in political-economic discussion?

    i don’t envy anyone the task of driving orstalia over the next ten years. decisions must be made now that will have consequences possibly fatal to oz standard of living, or even just ozzies. which is why ruddy is gathering his ‘thousand wise men’. he may not be ready for democracy, but he is ready to spread the blame widely.

    still, oz can be thankful. from a choice of two, they got the better sheep dog. imagine the libs with their hands on the wheel when actual change is required…

  7. wizofaus
    February 7th, 2008 at 15:56 | #7

    John, don’t see why that’s a problem – we only need to push this after 2012, and those doing the pushing really have very little responsibility for what was pushed for initially.

    I tend to agree with Terje though – I’m a “wary” technological optimist, on the basis that we already have a pretty good idea of what technologies we need and how much more work is required to commercialise them. I actually even suspect that with no emissions taxation at all we’d get there by 2050 – innovation is always spurred by the need to respond to a challenge (at least as strongly as the motive for profits). No-one really cared about efficiency 10 years ago, despite the profit motive – it just wasn’t an interesting problem (plus oil was cheap). Now we do, and the results will be only be good economically.

  8. MH
    February 7th, 2008 at 20:20 | #8

    Question is whether people really understand what Garnaut is now prepared to say, it’s not good and getting worse by the day. Despite the morally uplifting rains in some areas of late, down here on the farm in NW NSW, so far we are 50% below the monthly averages Dec, Jan and Feb and they were bad years. Trying to plan for this agriculturally is getting more difficult by the day, I am now working on a base rate of 1/3 of historical carrying capacity for the next few years. Nothing I saw a couple of weeks ago in the wheat belt of SA gave me any reason to be optimistic either. I guess no one notices the stories eminating out of Asia about rising food prices and the price push on cereals due to biofuels either.

    When Hansen, Lovelock and Suzuki of the notable media savy scientists all stopped talking one can only conclude they have nothing more to say. I still cannot believe some of the pundits on this blog who still subscribe to the fallacy of technology replacing ecology.

  9. Ikonoclast
    February 7th, 2008 at 20:48 | #9

    JQ reports that Garnaut said “Unless the world acts decisively, and well before 2020, we’ll have emissions higher than the highest of the IPCC scenarios Stern looked at.”

    I can tell you right now the world (of people) will not act or change until forced to by the laws of physics.

    Today we see the sad news (if the ABC website is correct) that;

    “The Queensland Government has provided exploration funding to enable mining companies to expand the search for coal seam gas and petroleum in the south-west.

    Thirty-two companies are sharing in $500 million to search throughout the state, including the Georgina Basin and Cooper-Eromanga basins.”

    http://www.abc.net.au/news/stories/2008/02/07/2156829.htm

    Given the current state of scientific consensus about climate change, why are our governments persisting with this rank stupidity of throwing big subsidies at the fossil fuel industry?

    The only analogy that makes sense to me is one of serious addiction and dependency. As a culture and an economy we are so addicted to and so dependent upon what we are doing right now that we cannot change our ways even though we know (in our more lucid moments) that our addictions will kill our planet and us.

  10. tipper
    February 8th, 2008 at 01:29 | #10

    Given the current state of scientific consensus about climate change, why are our governments persisting with this rank stupidity of throwing big subsidies at the fossil fuel industry?

    Errr, what consensus?
    We urge the United States government to reject the global warming agreement that was written in Kyoto, Japan in December, 1997, and any other similar proposals. The proposed limits on greenhouse gases would harm the environment, hinder the advance of science and technology, and damage the health and welfare of mankind.

    There is no convincing scientific evidence that human release of carbon dioxide, methane, or other greenhouse gasses is causing or will, in the foreseeable future, cause catastrophic heating of the Earth’s atmosphere and disruption of the Earth’s climate. Moreover, there is substantial scientific evidence that increases in atmospheric carbon dioxide produce many beneficial effects upon the natural plant and animal environments of the Earth.

    This petition has been signed by over 19,000 American scientists.

  11. jquiggin
    February 8th, 2008 at 05:53 | #11

    Oh tipper, not the Oregon petition again. It’s ten years old and was bogus all along. The signatories weren’t scientists – they were people who claimed to have done a science subject at university (to get to the full 19000 they dropped even that requirement).

  12. wizofaus
    February 8th, 2008 at 06:38 | #12

    MH, what “fallacy of technology replacing ecology”? My optimism is for technology that can work better within ecological limits.

    Put it this way – it’s far more likely we’ll develop technologies that allow us to maintain a high standard of living without unsustainably damaging the environment than it is that we’ll voluntarily and peacefully give up our current technologies and our high standard of living.

    What other choices are there that you would actually want to strive for?

  13. February 8th, 2008 at 10:45 | #13

    Geodynamics passed a milestone this week:-

    http://www.energycurrent.com/index.php?id=3&storyid=8713

    CO2 free baseload electricity here we come. Maybe. ;-)

  14. pablo
    February 8th, 2008 at 11:02 | #14

    Reasons for optimism Terge, but I’m curious as to why geothermal steam for power generation which has been going on in New Zealand for at least 30 years has not been heard from much. I’m aware their are some fairly corrosive problems that have to be overcome and you need a reliable supply of water.

  15. Donald Oats
    February 8th, 2008 at 11:04 | #15

    Tipper:

    This notion of “consensus” is diversionary and quite unhelpful. For any scientific theory, no matter how strong the evidence, some scientists somewhere will disagree with it; this is almost a law of nature :-)

    What really matters is the sum total of the theory and it supporting evidence, its predictive power, the gauntlet of falsifiability tests it has survived, and whether there are any other theories with at least as strong a basis in fact.

    For the modern era of the second half of the 20th century up to the present day, no other climate theories (hypotheses) come remotely close to AGW in matching the evidence. I’d rather run with the warranted theory of AGW in deciding our future behaviour than be hostage to speculative hypotheses at this stage in time.

  16. Spiros
    February 8th, 2008 at 12:11 | #16

    Consensus means general agreement. It doesn’t mean unanimous agreement.

    For example, there is a consensus at Al Qaeda flew planes into the World Trade Center on September 11 2001. But this view is not unanimously held, for some people think 9/11 was in fact a joint operation by the CIA and Mossad. This view is about as credible as the views expressed in the Oregon petition, but it’s there.

    There is a scientific consensus that AGW exists. Every authoritative scientific body in the world – where that authority was gained long before anybody had heard of AGW – agrees. That there are a few dissenting views is irrelevant to the existence of the consensus.

  17. wilful
    February 8th, 2008 at 13:20 | #17

    tipper, please don’t bother this blog with denialism bullsh*t, unless you’ve got something really new and insightful to share – in which case, I think Science or Nature may wish to read your findings.

    Nobody has laid a glove on climate change in any substantive manner since they resolved satellite measurements in the late 90s. Instead they are forced to nitpick trivialities and irrelevancies such as whether the hockeystick is or isn’t central to the case (it isn’t) and whether PPPs or exchange rates are the better economic tool (quite irrelevant to the science).

  18. MH
    February 8th, 2008 at 16:39 | #18

    Wizofaus; I am referring to the misplaced belief that we can continue as we are with no change and whizzo given we are so clever along will come a tech fix and we can all continue business as usual. You may like to look at Jared Diamond’s book “Collapse” he has very carefully listed the 12 fallacies evident in civilisations in a state of denial. You may now wish to consider the arguments by a noted ecological economist Herman E Daly regarding the illusion of solved economic problems merely having been delayed, that is the ghosts of Malthus, Marx, Keynes and the Club of Rome, stalk us still. If you look at the productivity boosts to agriculture since the late 1800′s they come from artificial fertilizers first and genetics second, then mechanisation. Most if not all of the technology has been fossil fuel driven, while coal may last another thousand years, we won’t burning it and petroleum supplies are now well and truly limited and availability decreasing. It is Catch 22 we need the fuels to solve the problem and to solve the problem we need to get rid of the fuels. We can change but the massive capital investment over the past 140 years now needs to be reinvested in alternatives of just about everything you can think of. Stern clearly showed that the costs of change were reasonable and achievable, in the interim by and large we have done nothing to change anything. I await with interest Garnauts’ revised costings especially vis a vis Australia.

    So you might like to consider the problem as put by Diamond ” What were the people of Easter Island thinking when they cut down the last tree”. So what are we thinking as we go about producing more CO2, depleting the most valuable energy resource the planet ever had and day by day destroying the planetary biosphere? The 12 fallacies will give you a clue!

  19. MH
    February 8th, 2008 at 16:49 | #19

    Postcript – as I stated in my first post here, given the problem of decreasing rainfall and hence the decreasing output possible from our land either by crops or animals which means in real terms that prudently to try and preserve, soil, biostructure and limited water availability (I might add in an area that had average of 800 to 1200mm per annum)arguing the polemics is not going to cut it. We will get to a point where food production is not viable and your going to become very hungry! I can live with where we are at now and we can manage with a little less over time but any more is simply end game! When anybody can disprove the concept of entropy and the laws of thermodynamics then I will listen to them about scientific conspiracies and climate change. And like Hansen, Lovelock and Suzuki I have nothing more to say but best of luck to all of you. I intend no further posts on the issue.

  20. Ikonoclast
    February 8th, 2008 at 20:04 | #20

    MH says, “When anybody can disprove the concept of entropy and the laws of thermodynamics then I will listen to them about scientific conspiracies and climate change. And like Hansen, Lovelock and Suzuki I have nothing more to say but best of luck to all of you. I intend no further posts on the issue.”

    That is the honest end point of scientific humanism. And I say that as a scientific humanist myself. Scientific humanism has failed. Nothing else could have succeeded either.

    In response to a question about the long run, Keynes replied, “In the long run we are all dead.â€? This is true for the human race even if we solve our imminent crises. The sun cannot burn forever. The universe cannot “run” for ever.

    Soon, whether it is in 10 years or 100 or 1000 or 10000 or 100000 or a million years, humanity will be gone. “A dream the world breathed sleeping and forgot.” – to use Shakespeare’s words.

    Macro species are not even that important to the earth’s biota. Microbes and viruses are the bulk and the base. We should stop kidding ourselves. We are not important even on earth. On the cosomolgical scale we are quite irrelevant.

  21. kyangadac
    February 9th, 2008 at 06:03 | #21

    On climate change – Luke 17:28
    On AARES – really important and interesting issue is the current food shortage. As in current record low of food reserves being equivalent or worse than 1971 when the world was last racked by serious famines. Today exacerbated by biofuel consumption – what’s the bet the subsidies are gone within 2 years. More importantly, there’s no technological fix like the “green revolution” sitting on the shelf, biotech notwithstanding. This means that the famines will be prolonged, exacerbated by rising costs of fertilizers, fuel, climate, pollution, consequences of water mining etc.

    It’s worth bearing in mind that hungry people , have a greater than average tendency toward revolution and war. I’m talkin’ the next 2 -3 years here.

  22. February 9th, 2008 at 08:00 | #22

    Terje: Geodynamics managed to finish drilling a hole in the ground. Tough, thick granite, mind you, so that’s not an insubstantial achievement.

    While I like their idea (heck, I’ve got a little money invested in them) that’s a hell of a long way from being able to produce industrial quantities of baseload power…

  23. Ikonoclast
    February 9th, 2008 at 16:30 | #23

    Comment 21 is spot on.

  24. February 10th, 2008 at 13:04 | #24

    Unless the world acts decisively, and well before 2020, we’ll have emissions higher than the highest of the IPCC scenarios Stern looked at.

    Oh come on people, who is kidding themselves that we’re going to act decisively before 2020? If there was any chance of that at all we’d be taxing carbon now, or rationing, or pricing it in some way.

    Who here believes that either major party will go to an election before 2015 with policies that either ration energy, or make energy more expensive?

    Anyone?

  25. wizofaus
    February 10th, 2008 at 15:45 | #25

    There will be policies in place by 2015 that make the unit cost of energy more expensive than it would have been otherwise.

    I don’t seriously believe that anyone is going to be much worse off for it though, and certainly very few people are going to be paying a higher % of their income on energy than they are today – unless oil prices go through the roof of course.
    Most will compensate for higher unit cost by using less, and between now and 2015, wages will go up faster than the price of energy (again, excluding possible oil price spike).

  26. Ken Miles
    February 10th, 2008 at 16:08 | #26

    I’m curious as to why geothermal steam for power generation which has been going on in New Zealand for at least 30 years has not been heard from much. I’m aware their are some fairly corrosive problems that have to be overcome and you need a reliable supply of water.

    New Zealand’s geology is far more suited for geothermal power than Australia. The areas of NZ where geothermal power is used literally have hot water bubbling up to the surface.

  27. Ken Miles
    February 10th, 2008 at 16:32 | #27

    This petition has been signed by over 19,000 American scientists.

    That petition is the biggest load of rubbish ever.

    When US Senator James Inholfe recent came up with another anti-global warming list he could only find 400 scientists to sign on (and some of these scientists didn’t actually sign on – they had there names added without their consent) – and that was helped by bulking it out denialists such as Louis Hissink who wouldn’t meet the scientist criteria by any stretch.

    By comparison, The Discovery Institute can get almost twice as many scientists signing up to its anti-Darwin petition (which has stricter requirements than both the OISM petition and Inholfe’s list).

    A better question would be; how many scientists who have actually published in the field of climatology disagree with global warming. The answer is very very small.

  28. Ian Gould
    February 10th, 2008 at 16:35 | #28

    Re. per capita allocations, the IPCC per years have been taking about “cap and convergence” meaning the world sets a cap on total emissions, the countries above the per capita average agree to bring down their emissions to the average and the countries below the average agree to limit their emissions growth to no more than the average.

    This means the countries which have historically caused the problem and which continue to emit more per capita, agree to delivering the largest reductions and the countries which have historically low emissions accept limits to their growth in emissions.

    For the first time, India and China accepted that last bit, in principle, at the Bali summit.

    Current per capita emissions are around 5.6 tonnes of carbon dioxide equivalent per capita.

    Australia’s emissions are around 25.6 tonnes per capita.

    So reducing our emissions to the global average requires cuts of around 74%.

    That sounds bad enough but scientists are saying we need to reduce total global emissions by around 80% – to around 1.4 tonnes.

    So really the long-term (2050) target is not a 74% reduction, it’s a 95% reduction.

    Even China will need to reduce emissions by around 65% from current levels to reach that long term target.

  29. Ian Gould
    February 10th, 2008 at 18:17 | #29

    “When US Senator James Inholfe recent came up with another anti-global warming list he could only find 400 scientists to sign on (and some of these scientists didn’t actually sign on – they had there names added without their consent) – and that was helped by bulking it out denialists such as Louis Hissink who wouldn’t meet the scientist criteria by any stretch.”

    Actually Ken it’s even worse than that.

    There are only around 200 names listed in Imhofe’s report. He gets the 400 signatories number by adding two petitions.

    But a number of the signatories to those petition signed both and some of those same signatories are also listed in the main report.

    So even with counting TV weathermen as “prominent scientists” Imhofe couldn’t scare up 400 denialists.

  30. February 10th, 2008 at 18:25 | #30

    Most will compensate for higher unit cost by using less, and between now and 2015, wages will go up faster than the price of energy

    May I respectfully suggest that if wages increase faster than energy prices we will use more energy in the future not less.

    Am I missing something, but isn’t the whole point of a carbon tax to raise the real price of (fossil) energy? If not, then where is the price signal that drives conservation?

  31. Peter Wood
    February 10th, 2008 at 19:35 | #31

    Carbonsink,it is important to bear in mind that Australia’s residential sector (including residential electricity use and residential transport use),is responsible for only 18.7% of Australia’s emissions (2005 figures). If wages increase faster than real energy prices then while it might increase energy consumption in the residential sector it won’t affect consumption in other sectors.

    If permits are primarily auctioned in an ETS (or if there is a carbon tax) then if 18.7% or more of the money that is raised is returned to the residential sector (by raising the low income tax offset for example), then it will be more politically palatable to raise energy prices.

    It should be mentioned however that about 30% of meat from cattle produced in Australia is consumed domestically. The figure above doesn’t include emissions required to produce stuff that we buy. This is also a problem with a lot of the online “emissions calculators’.

  32. Ian Gould
    February 10th, 2008 at 20:18 | #32

    With regard to energy prices, a couple of months back I posted some figures from the IEA (who are huge boosters of coal and nuclear power), we can put a fairly confident upper limit on energy prices – it’s the maximum current price of wind power.

    From memory, the worst case scenario for Australia was a cost of ca. $60 billion per year.

  33. February 10th, 2008 at 20:45 | #33

    If permits are primarily auctioned in an ETS (or if there is a carbon tax) then if 18.7% or more of the money that is raised is returned to the residential sector (by raising the low income tax offset for example), then it will be more politically palatable to raise energy prices.

    I agree that is the only way to sell it — a carbon for income tax trade off, with plenty of dollars thrown at welfare for good measure. Kinda like Howard’s “A New Tax System” deal in 2000, but bigger, broader and more difficult to sell.

    I also agree that getting the non-residential sectors (heavy industry, mining etc) to put in more than more than their fair share will make it more politically palatable.

    However, what I fail to see is any sign of the political will to do any of this.

    Out there in the shopping malls of Australia people just don’t care about this stuff and the pollies know this. What they really care about is petrol prices.

  34. wizofaus
    February 11th, 2008 at 04:29 | #34

    carbonsink, it’s not necessarily the case that people will use more just because wages rise faster than energy prices. Mortgages may well continue to rise faster than both, for a start.

    Further, to use more energy usually incurs additional expenses – buying bigger cars, buying bigger houses, air-conditioners etc. They may not become particularly more affordable.

    And lastly, it doesn’t matter too much if total energy usage rises somewhat, so long as total CO2 output doesn’t rise. By 2015 Australia’s energy supply will inevitably be slightly less CO2-intensive than it is now.

    My estimate is that Australia’s net CO2 emissions by 2015 will be barely higher than for 2007, and might just have started on a downward path.

    Look at the EU-15: many countries are down nearly 20% since 1990. Sure they have much more stable populations, and less energy-intensive industries, but there is reason for hope.

    The big worry is China.

  35. Peter Wood
    February 11th, 2008 at 08:47 | #35

    I guess it all depends on the income-elasticity of electricity demand :)

  36. wilful
    February 11th, 2008 at 09:22 | #36

    There’s quite a lot of elasticity in residential electricity demand. As soon as people are told that a plasma telly uses at least twice the electricity as an LCD one, a little (LED) lightbulb will go off. Same with halogen downlights, they will date a house to having been built/renovated in the 90s or 00s. Grid connected solar will pop up in every street. Solar hot water will be standard. Cutting residential emissions is relatively easy – I’m no zealot and I’ve sacrificed absolutely zip, but our household emissions are well less than half the average. Plane flights are my only problem, otherwise I think our family is at about 4 – 6 tonnes a year.

    If we can’t educate, we can regulate. Like banning inefficient bulbs, mandating 5 star houses. Pretty painless stuff.

  37. wizofaus
    February 11th, 2008 at 09:34 | #37

    wilful, our household emissions are pratically zero, thanks to the fact that most taxpayers subsidise 100% green energy, and that I get to work from home 5 days a week.

    If everyone that was realitically able to followed suit (or came as close as possible), Australia’s household emissions could probably drop by 10% overnight.

    We are flying overseas in a couple of weeks, and I’ve researched various not-for-profit organisations that offer “carbon credit” type services: for a pretty small donation you can effectively cancel out the carbon cost of a plane flight.

  38. wilful
    February 11th, 2008 at 09:40 | #38

    wizofaus, yeah we’re on Origin green energy (gas and electricity), but I remain sceptical of carbon credits – yes I know how they work, but I think there are a few accounting tricks hidden in there and wonder what the real final net difference is. Far better to limit emissions in the first place. We’re getting solar panels in a few weeks – massively subsidised by the Government.

    But I really like going on holiday overseas and can’t afford to sail there. While work sends me around Australia from time to time, in a way that cannot be videoconferenced. Oh well, middle class guilt. Offset by tree planting on my mother’s farm.

  39. February 11th, 2008 at 11:43 | #39

    Terje: Geodynamics managed to finish drilling a hole in the ground. Tough, thick granite, mind you, so that’s not an insubstantial achievement.

    While I like their idea (heck, I’ve got a little money invested in them) that’s a hell of a long way from being able to produce industrial quantities of baseload power…

    Robert – it may be a long way, or it may not be. Only time will tell. I think that their technology is most likely going to work as planned, with the real uncertainty being in the price. The latter will determine whether the technology is scaled up. The same is true for solar towers of the Enviromission variety.

    In all these initiatives I think some investors are tempted to hold out for a better offering from the government in terms of the government assuming some of the commercialisation risk. Thats a pity but kind of understandable give the noises that emminate from politics.

  40. February 11th, 2008 at 11:48 | #40

    Like banning inefficient bulbs, mandating 5 star houses. Pretty painless stuff.

    If you must ban incandesants light bulbs because education is too tough then can you ban them for 5 years only instead of permanently? That should allow time to roll over the stock of lightbulbs in most houses and it should get people used to the alternatives. Banning incandesants permanently seems like an unnecessary bar on competition.

  41. wizofaus
    February 11th, 2008 at 12:06 | #41

    wilful, plane flights are the one area where it just isn’t really possible to limit emissions much.
    Given they only make up about 2-3% of total emissions, this isn’t such a big deal.

    I’m confident that the organisation I found offering carbon credits is genuine. The main problem is being confident that they’ll remain around long enough to ensure any planted trees remain protected.

  42. wizofaus
    February 11th, 2008 at 12:07 | #42

    Terje, it’s worse than that – in many cases there are no adequate replacements. Most of the lights in our house are on dimmers, and we make a point of keeping the dimmers low for the most past.
    I’ve yet to find non-incandescent globes that are compatible with our fittings.
    And given we pay for 100% green energy, why on earth should we not be allowed to use less efficient globes?

  43. wizofaus
    February 11th, 2008 at 12:33 | #43

    (actually that last question does have one answer – because our 100% green energy is subsidised by other taxpayers. But we already make an effort to keep our usage well below the state average).

  44. February 11th, 2008 at 12:40 | #44

    I have very few incandesants in out house. I replaced them because I hate the time and effort involved in rountinely replacing blown bulbs. However I leave some of them on 24×7 because it improves the amenity of the house.

  45. wilful
    February 11th, 2008 at 12:42 | #45

    Terje, incandescents were not banned. Inefficient were. So there’s no anit-competitive act, if the good ole edison globe wants to work out how to provide more light, less heat, go for it.

    Of course, a simple carbon tax that raised the price of electricity would have been far more pure and homo economicus supports that, however we do happen to live in the real world, where the measure was roundly supported and no one is really grumbling.

    wizofaus, you can find dimmable CFLs, I know they exist.

    Plane emissions may be on 2-% of world emissions, but they’re about 50% of chez wilful emissions.

  46. wizofaus
    February 11th, 2008 at 12:57 | #46

    wilful, I know they exist – but I’ve never found any that are compatible with our existing fittings.

    It’s a silly ban, and totally unnecessary.
    I’m grumbling!

    BTW, I will say that given the enormous economic pressure on airlines and aircraft manufacturers to reduce fuel usage, it would be surprising if in another 10 or 15 years planes weren’t generating far fewer emissions. Hopefully by just enough to counter for the fact that more people will be flying – though of course a lot depends on a potential oil price spike.

  47. February 11th, 2008 at 15:03 | #47

    Incandesents are not so inefficient in winter or in cold regions. The heat they give off merely reduces the need to heat the home in other ways. So banning so called inefficient light bulbs makes more sense in Queensland than in Tasmania.

  48. wizofaus
    February 11th, 2008 at 16:21 | #48

    Terje – I realised the same myself not long ago. Inefficient appliances are bad in summer, not in winter. But – efficient appliances + decent insulation/building design is better. Apart from perhaps southern Tasmania, you should be able to build a house almost anywhere in Australia that needs no fossil-fuel powered heating or cooling at all.

  49. February 11th, 2008 at 20:18 | #49

    We are flying overseas in a couple of weeks, and I’ve researched various not-for-profit organisations that offer “carbon credit� type services: for a pretty small donation you can effectively cancel out the carbon cost of a plane flight.

    Lordy! The naivety! Do you honestly believe a few bucks spent on “carbon credits” will undo the damage done by f*rting out several tonnes of CO2, NOx and water vapour into the upper atmosphere? The trees you plant will take 50 years to undo the damage you do in 24 hours, and you have no guarantee whatsoever that the trees will survive past next week.

    Stop kidding yourself. Flying is the single most environmentally damaging thing you can do. Admit it yourself and deal with it. The only to fly carbon-neutral is not to fly.

    If you must ban incandesants light bulbs because education is too tough then can you ban them for 5 years only instead of permanently? … Banning incandesants permanently seems like an unnecessary bar on competition.

    We wouldn’t want some nasty regulation to interfere with the purity of the market now would we Terje? As you would know, maintaining the purity of the market is much, much more important than maintaining a habitability of the planet. Please God, save me from the libertarians.

  50. gerard
    February 11th, 2008 at 21:05 | #50

    anyone reading this blog a Brisbane resident aged 18-25?

    http://www.uq.edu.au/events/event_view.php?event_id=3904

  51. Ian Gould
    February 11th, 2008 at 21:14 | #51

    “The trees you plant will take 50 years to undo the damage you do in 24 hours, and you have no guarantee whatsoever that the trees will survive past next week.”

    Actually most reputable offsets operations purchase insurance and are bound by contract to replant the same number of trees if the first planting is destroyed by drought or forest fire.

    Not to mention all the various offsets not based on planting trees.

    I’m really getting tired of people attacking offsets or emissions trading or nuclear power or alternate energy or carbon taxes or geosequestration or energy efficiency or any other alternative to what they’ve decided is THE ANSWER.

    Ever stop to think there is no single answer, folks?

  52. February 11th, 2008 at 23:00 | #52

    Please God, save me from the libertarians.

    We were sent by God to test your patience. If you pass the test you get extras in the after life. In the interum please try to suffer a little more silently. ;-)

  53. mugwump
    February 12th, 2008 at 01:56 | #53

    I like my incandescents. Unlike CFLs (Compact Fluorescent Lamps), when they break they don’t constitute an immediate health hazard due to the evaporation of mercury into the atmosphere.

    Mostly only a health hazard to children though, so I guess that’s ok, since the environmentalists tell us procreation is the single greatest injury we can do to GAIA.

  54. wizofaus
    February 12th, 2008 at 06:39 | #54

    carbonsink, I’ll trust the scientists involved in the organisation thank you very much. And it’s irrelevant whether the trees absorb the polluton from my particular flight – what matters is that they are trees that would not have been planted anyway.

    The trip is at the insistence of my employer. I have already talked him out of 3 previous trips.

  55. Ken Miles
    February 12th, 2008 at 08:55 | #55

    Stop kidding yourself. Flying is the single most environmentally damaging thing you can do. Admit it yourself and deal with it. The only to fly carbon-neutral is not to fly.

    I disagree strongly with the sentiments behind this statement. We should be looking for ways to reduce our CO2 emissions which have the minimum cost. Given the massive contribution which aviation makes to our standard of living (and if the alternative to flying is not flying [a not totally true statement]), then rather than not flying we should look at cutting carbon dioxide emissions in other areas where it can be done more cheaply (power generation, land management, car efficiencies etc).

  56. February 12th, 2008 at 10:05 | #56

    He he … good to see I’ve stirred up some discussion :)

    Three points:

    1. I didn’t suggest that we stop flying. In fact, jet aviation is the one place where we have very little opportunity to reduce emissions because there is no low emissions alternative on the horizon. So I agree with Ken that we should be looking to cut emissions in other areas, but we should also be looking at curtailing the exponential growth in aviation.

    2. Any carbon offset organisation could go out of business tomorrow, as many did recently in NSW when the carbon price collapsed. The timescales involved in mass tree planting (50 years+) are so long that any “contract” is essentially meaningless. Hey, if we don’t take serious action soon I’m not confident that western democracy will survive the next 50 years, let alone tree planting contracts honoured. Oh and FYI, the offset schemes that invest in low emission energy are much more worthwhile, and I’m not opposed to nuclear power, carbon taxes, emissions trading, alternative energy, and certainly not energy efficiency. What I am opposed to fraudulent carbon offset schemes that offer to alleviate carbon guilt.

    3. Terje. Love Ya, wouldn’t come here if it wasn’t for your pearls of wisdom.

    P.S. I just bought an offset from Jetstar for $0.82 each way on a flight to Brisbane. I planted 500 trees on my property last year, and I couldn’t buy a rainforest tube for that!

  57. wizofaus
    February 12th, 2008 at 10:32 | #57

    Carbon, which is why I’m donating to a not-for-profit organisation that doesn’t depend on carbon trading schemes. I intend to donate several hundred dollars. I have no idea what 82c as a carbon offset is supposed to achieve.

  58. February 12th, 2008 at 10:59 | #58

    wizofaus, you said:

    I’m confident that the organisation I found offering carbon credits is genuine. The main problem is being confident that they’ll remain around long enough to ensure any planted trees remain protected.

    You might be better off putting the several hundred dollars into insulating your house, or replacing an inefficient appliance (like electric storage hot water). At least then you can take personal responsibility for emissions avoided.

    If you want to plant some trees, go volunteer an afternoon with the local Landcare group.

    I have no idea what 82c as a carbon offset is supposed to achieve.

    I don’t either, but I checked the box for a laugh!

  59. wizofaus
    February 12th, 2008 at 13:44 | #59

    carbonsick, insulating the house is definitely on the list, but not something we can afford at this point, and we’re not sure how long we’re staying here.
    We have no electric storage hot water, and our electricity and gas usage are already well below the state average.

    For me to personally plant enough trees and care for them long enough to make up for the emissions our flight would be responsible for is hardly realistic.

  60. February 12th, 2008 at 15:39 | #60

    wizofaus, so you don’t have any inefficient appliances, an old fridge, an electric heater or two, a gas guzzling car, or any other way of reducing your carbon footprint?

    Pretty much any of these measures would be better than planting trees. It is much better to not emit the carbon in the first place than try to undo the damage over 50 years with some offset scheme.

    You know I’m talking sense.

  61. rog
    February 12th, 2008 at 16:14 | #61

    We use minimal lighting – solar tubes illuminate dark corners by day and dimmable downlights reduce the glare by night with flouros as the workhorses.

  62. wizofaus
    February 12th, 2008 at 16:15 | #62

    Not that I can realistically fix with a couple of hundred dollars, no. And how could I know that such an action would actually make up for the emissions from my flight?

  63. gerard
    February 12th, 2008 at 17:41 | #63

    …Nor can certain harmful effects of deforestation, or of some methods of farming, or of the smoke and noise of factories, be confined to the owner of the property in question or to those who are willing to submit to the damage for an agreed compensation. In such instances we must find some substitute for the regulation of the price mechanism.

    Friedrich von Hayek, 1944

  64. February 12th, 2008 at 19:03 | #64

    Not that I can realistically fix with a couple of hundred dollars, no. And how could I know that such an action would actually make up for the emissions from my flight?

    It won’t. Nothing can make up for the emissions from your flight, short of locking yourself in a box for a year and starving yourself. I’m not trying to be a hair shirt here, but them’s the facts.

    Why not keep your money and start saving for insulation or solar hot water? At least then you know you will reduce your carbon footprint even if you move house. With a tree-planting scheme you have no guarantees about anything.

    The trees will only start absorbing significant amounts of CO2 after several years. If you’re lucky the treed will store the carbon for a few decades, then die and release it again, around 2050 when TSHTF. And that’s if the trees are actually planted, if they survive past a few years, if they don’t get burnt down in a bushfire, and if they didn’t replace some other vegetation.

  65. Brian Bahnisch
    February 12th, 2008 at 23:18 | #65

    On Geodynamics, They’ve drilled two holes 500m apart and established that they are hydrologically connected. As we speak they are trying to establish ‘proof of concept’ by pumping water down one well and drawing it up out of the other after heating by passing through the hot fractured rocks. I’m thinking it is not working out all that well because otherwise why is the share price sliding gently by the day? Still it can’t be a disaster, otherwise the share price would fall out of bed.

    The plan is to then build a 1MW pilot plant to power the site, followed by a 50MW plant and transmission lines, followed by a commercial base-load operation requiring 6 rigs drilling 81 wells with power to come on stream in 2016.

    The rig they use weighs about 900 tonnes, costs over $30m and was made to order in Texas.

    Origin Energy has farmed in with a 30% stake in the joint venture.

    The concept involved two closed loops linked to a heat exchanger. I understand that water is not a problem, there is plenty down there. They just have to strain out the dreck so that it doesn’t chew out the pump.

    Like Robert M I’ve invested in a few shares which I consider speculative.

  66. Brian Bahnisch
    February 13th, 2008 at 00:19 | #66

    Ian Gould at #28 gives some very stark figures on the reductions of emissions necessary. My figuring is slightly starker.

    Most figures given for total emissions leave one or more categories out. This chart, dated October 2006, gives total emissions at 41,755 MtCO2e. From memory IPCC4 gave 43 Gt. The CIA World Fact Book gives the world population as 6.6 billion. This gives a per capita figure of 6.5 tonnes of CO2e per person.

    Monbiot in his book Heat projects forward to 2030 when the population is expected to be 8.2 billion. The amount that the planet can absorb safely is given as 4 billion tonnes of carbon, which, because of failing carbon sinks is expected to fall to 2.7 billion tonnes by 2030.

    2.7 billion translated into CO2e becomes 9.9 billion tonnes. For a population of 8.8 billion this provides an allowance of 1.2 tonnes per person.

    The next step is to look at this Wikipedia list of countries ranked by per capita CO2 emissions. You’ll find China at 3.84 and India at 1.2.

    There are two things wrong with this list. First it is out of date (2004).

    Second, it lists CO2 rather than CO2 equivalent, and probably leaves some categories out. Australia, for example, is at 16.3 rather than 25.6 as cited by Ian. If Australia’s emissions have to shrink from 25.6 per capita to 1.2, that is roughly 95%, but by 2030 rather than 2050 in Ian’s post. By 2050 the sinks would be even more disabled and the world population higher.

    If you think about the convergence theory for a nanosecond you will surely see that it is a disaster because it involves no net reduction of emissions until we all meet at the average and then go down together.

    Any comments?

  67. mugwump
    February 13th, 2008 at 03:04 | #67

    As we speak they are trying to establish ‘proof of concept’ by pumping water down one well and drawing it up out of the other after heating by passing through the hot fractured rocks. I’m thinking it is not working out all that well

    …no pun intended? My guess: the water goes down hole #1 never to be seen again.

    otherwise why is the share price sliding gently by the day? Still it can’t be a disaster, otherwise the share price would fall out of bed.

    Seen that one before. An alternative explanation: insiders know it is a disaster and are selling off. Outsiders have yet to catch on, so are still picking up the insiders’ stock.

  68. February 13th, 2008 at 08:29 | #68

    Ian #28 and Brian #66:

    I couldn’t agree more. The task is mammoth.

    Anyone who hasn’t read Monbiot’s Heat should read it now, especially the “one percenters” (i.e. those who think bringing emissions down to a level that will stabilise the climate will cost ~1% of GDP) ProfQ included.

    I note that many of the one percenters fall into the same group who believe that developed nations need to make the biggest cuts (again, ProfQ included). No arguments there, but if you take that position you must also accept that developed nations need to reduce emissions not by the oft-quoted 60% by 2050, but more like 95% by 2050 (or earlier) as Brian and Ian point out.

    In Heat Monbiot outlines a plan to reduce the UK’s emissions by ~90% by mid century. Its a stupendous effort, requiring huge changes to lifestyle and major restructuring of society. Monbiot’s arguments are convincing and sobering, and are starkly different to the one percenters don’t-worry-emissions-trading-will-fix-it view.

    Now for my favourite spanner in the works:

    If there is a peak in oil production in the next 5-10 years much of the decline in conventional crude will be met by oil sands, coal-to-liquids and palm oil plantations in tropical forests. All of which will significantly increase CO2 emissions per barrel of oil produced.

    Anyone who believes we’re all going to be zipping around in electric vehicles by 2030 powered exclusively by wind and solar is seriously deluded.

  69. wilful
    February 13th, 2008 at 08:41 | #69

    Brian, (taking all your figures at face value) if the target is 1.2, then Australians have to step down from 25.6 to that figure starting today, while China doesn’t get to go up at all, it just has smaller steps (like 50% not 95%).

    If all of your figures are correct, then we’re in for a pretty wild ride. And it’s all our fault – we can’t say we wern’t warned.

    But there will be a specially warm place in hell for John Howard, Andrew Bolt, George Bush etc.

  70. wizofaus
    February 13th, 2008 at 09:19 | #70

    carbonsink, I’ve already concluded that geo-engineering will be attempted, just to buy us some more time. We better hope it works.

  71. Brian Bahnisch
    February 13th, 2008 at 17:26 | #71

    Wilful, I’ve been working the figures over and over again since I read Heat and I can’t get it to come out any other way. I agree with carbonsink that anyone who hasn’t read Heat should do so. He did his research before Stern or IPCC4 came out and I think ended up with a better bead on the problem.

    Wilful, if China has to reduce from 3.84 to 1.2 tonnes per person they need to shed about 70% unless they shed some people. That’s if the 3.84 figure is right, and it’s probably a fair bit higher.

    Nic Gruen had an interesting article in today’s AFR which he has just posted at Troppo. He favours a country per capita allocation for all countries, developing countries included, and some sort of WTO-like organisation to sit above countries on the issue.

    The Europeans have shown how there can be considerable variation between countries within an overall target.

    The situation as it is emerging, however, seems to be far more urgent than the European official policy currently admits. In Climate Code Red which someone linked to above the authors work through the implications of recent research and developments such as the 22% collapse of Arctic ice cover in 2007 as compared with the previous record of 2005.

    They make a very cogent (though very repetitive) case, I think for targeting a “climate-safe zoneâ€? of 0.5C above pre-industrial levels and CO2e ppm levels of 320ppm or less. Don’t just throw up your hands, have a read. They have fully taken on board the latest climate observations, the peer-reviewed climate literature, and applied ‘normal’ risk criteria. That is, they have taken seriously the problems Weitzman was addressing (without addressing Weitzman as such.)

    I’m still reading, but where they seem to be heading is putting the world economy on a war footing and decarbonising it within 10 years. Otherwise the risk of it getting right out of control is unacceptably high.

    So what do you reckon our chances are?

    Not good, I’d say unless something dramatic happens like a storm surge overwhelming the low-lying parts of New York, or similar. That is not entirely outside the realms of possibility.

  72. February 13th, 2008 at 19:05 | #72

    So what do you reckon our chances are?

    Buckleys to none. We live in a world where politicians win elections by promising inquiries in to petrol prices.

    Honestly, I don’t know why people kid themselves that any serious action will be taken. We’ll just keep accelerating towards the cliff until we fall off.

  73. Ian Gould
    February 13th, 2008 at 19:39 | #73

    “If there is a peak in oil production in the next 5-10 years much of the decline in conventional crude will be met by oil sands, coal-to-liquids and palm oil plantations in tropical forests. All of which will significantly increase CO2 emissions per barrel of oil produced.”

    This depends on a couple of factors: one is how quickly output declines once we’re past the peak, the other is the relative availability of the other two realistic short-term large volume replacements for conventional oil – biofuels and GTL (Gas to Liquid).

    GTL (converting natural gas to liquid fuels) is likely to play a bigger part in substitution for conventional oil than sands and tars – at least until we hit peak gas.

  74. February 13th, 2008 at 22:37 | #74

    GTL (converting natural gas to liquid fuels) is likely to play a bigger part in substitution for conventional oil than sands and tars – at least until we hit peak gas

    Well that’s not what the EIA says. In this 2006 paper they forecast the following for 2030 (million barrels per day):

    Reference case:
    Oil Sands: 2.9
    CTL: 1.8
    GTL: 1.1
    Biofuels: 1.7

    High oil price case (duh!):
    Oil Sands: 4.9
    CTL: 2.3
    GTL: 2.9
    Biofuels: 3.0

    But I agree GTL will have a role to play. Of course, it would make a lot more sense just to burn the gas directly in a CNG vehicle, but I fear we won’t see much sense in years to come.

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