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Easter reflections

March 20th, 2008

An early edition of reflections for the Easter long weekend. Write on any topic, or just “what I did for Easter”. Feel free to write at greater length than for a standard comment thread. As always, civilised discussion and no coarse language.

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  1. gerard
    March 20th, 2008 at 18:42 | #1

    I’ve just finished reading Naomi Klein’s ‘Shock Doctrine’, which Dagget has been ceaselessly recommending on this blog lately. Now I remember being somewhat underwhelmed by the heavily-hyped ‘No Logo’ circa 2000, but this new book is of a totally different calibre. Get it and read it, it will knock you flat.

  2. Ikonoclast
    March 20th, 2008 at 19:48 | #2

    I encourage all of you to join the “Stay home at Easter” brigade. There are many good reasons to stay home at Easter.

    1. Save money, save petrol and save the environment.

    2. Easter is too short for a “going away” holiday but is just perfect for veging out at home for four days.

    3. It almost always rains at Easter. (This is certainly true in S.E. Qld and is related to the Easter full moon.)

    4. Camping, driving, hiking etc. are all most unpleasant when it’s wet.

    5. The roads are a dangerous place to be at Easter. Stay off them, stay safe and get in training for a world with far fewer automobiles.

  3. Donald Oats
    March 20th, 2008 at 21:57 | #3

    I used to love staying at home in Sydney at Easter – everyone else went somewhere else :-)
    This year though, I am enjoying the peace and quiet of Murray Bridge for the second year running. Armed with laptop, fast internet and a good book but an Amazon click away, all that is missing is drinkable water. Damn that global warming…

    Have a good Easter all.

  4. mugwump
    March 21st, 2008 at 04:17 | #4
  5. March 21st, 2008 at 08:14 | #5

    Ross Garnaut’s interim report is a great disappointment. He has taken the view of most economists that price is the answer to reducing greenhouse emissions. He says that if we increase the price by enforcing emissions targets then this will encourage investment in renewable energy technologies. The evidence where this has been tried is that it is at best ineffective.

    There are other ways of encouraging investment in renewable energy without requiring the price of ALL energy to rise to the cheapest renewable price.

    The simplest way that will not change the GDP of the country, will be socially equitable, is guaranteed to work, is simple and cheap to implement and can be started immediately is to add a small surcharge to all polluting energy (or divert a small amount of existing tax). This surcharge is NOT taken by the government as a tax but is given to consumers who use little polluting energy – mainly the poor. The money MUST be spent on ways to reduce greenhouse gas emissions either through saving energy or investing in renewable energy projects.

    What this approach does is to divert some expenditure – mainly consumption – to renewable energy investments. The increase in price required is a lot less than that needed by increasing the price through trading and it can be easily modeled and monitored. The amount of investment needed to meet a given target and the time available can be estimated. The surcharge necessary to meet this investment goal is calculated. The market in renewable energy infrastructure will then allocate the money in the most efficient manner. If the surcharge is too great or too little it can be changed immediately.

    I challenge economists to give me reasons why this will not work and why it is not the most cost effective way of reducing emissions.

    So far in my efforts to promote the idea I have been told “that it is too complicated and will cost too much”. I rebut this with the claim that it can be done for no cost to the government and paid for with fees no greater and probably less than current fees involved in transferring money from investors to projects. The first implementation would take less than three months and it would cover all electricity and all transport fuel and all industrial use of energy within a year.

    Another “reason” given is that if it is such a good idea why isn’t everyone doing it. I can’t answer that except to say that people may well have said that about pre-sliced bread.

    Another reason that it does not happen – and the one I believe is the main reason – is that governments lose the power of patronage involved in distributing money from the sale of emission permits and/or collecting then distributing taxes. That is, they think they lose the ability to buy votes. As governments are the institutions best able to introduce this regime this makes it a difficult task to introduce as they see it is not in their interests. The bureaucracy dresses up the objection by saying money collected by the government should not be hypothecated. I counter this by saying the government doesn’t collect the money only says how it is to be distributed.

  6. Salient Green
    March 21st, 2008 at 08:33 | #6

    Staying home at easter is also a good opportunity to have a lavish barbeque with some of the extended family and to eat it at a decent sized table with good plates and cutlery.
    I’m going away next weekend, diving for crayfish. Hopefully the easter divers miss a few.
    Cheers to Donald Oats, I have an orchard just up the road at Mypolonga.

  7. Salient Green
    March 21st, 2008 at 09:00 | #7

    Kevin Cox, I can tell you one thing, and it is that too many people have too much money to give a stuff about electriciy or fuel prices. For these people it is just too easy to pay the cost of leaving lights on, putting the clothes straight from the washer into the dryer, shooting up to the supermarket in the SUV seven days of the week and regularly fly all over the world.

    It’s not enough to encourage renewable energy. We also need to seriously cut consumption and bugger the profits of power companies. The only way to seriously address that is for everyone to have an allocation of emissions, above which you will have to pay some big money. This system should also apply to all water users.

  8. Hermit
    March 21st, 2008 at 09:08 | #8

    Reading the interim Garnaut report
    http://www.garnautreview.org.au/CA25734E0016A131/WebObj/MicrosoftWord-GarnautClimateChangeReviewInterimReport_ExecutiveSummary_-Feb08/$File/Microsoft%20Word%20-%20Garnaut%20Climate%20Change%20Review%20Interim%20Report%20_Executive%20Summary_%20-%20Feb%2008.pdf
    I see fundamental flaws. The 2010 target looks like it will be 8% up on the 1990 baseline, yet if the overall path is 20% down on 1990 then the first year should be say a 12% cut prorata.

    It’s too early to absorb what ‘carbon banks’ may imply but the several proposed avenues for compensation may lead to a scramble for cash. We could envision coal miners standing around collecting some kind of fabulous dole payment. That will create a field day for the anti-mitigation camp. Then there is the possibility that it all may be overtaken by events what with $110 oil and coal prices increasing 50% a year.

  9. March 21st, 2008 at 09:36 | #9

    Salient Green that is exactly why the proposed scheme will work. People do not care. However, if you give them some money that they can only get benefit from by investing in renewables or in saving energy then they will do it to get a benefit.

    The idea is to build upon and work with selfishness because that is the only thing we can be guaranteed will work. That is why the key to the idea is requiring the surcharge to be spent on reducing greenhouse gases. You get no benefit from the money unless you do this (or sell the money to someone who will do so). Human nature will mean that anything else like emissions targets will never work because they can be bypassed – if not by Australia by New Zealand:)

  10. Ikonoclast
    March 21st, 2008 at 09:49 | #10

    Capitalism and Communism in their current forms will both fail to rein in greenhouse gases. Neither system has essentially recognised that economy is dependent on the environment. They say they have but if you judge them behaviourly then it is clear they have not.

    Until all the fossil fuel subsidies are removed ($10 billion per annum in Australia) it is clear our politicians, economists and the public are not even remotely serious about tackling the problem.

    As a final poser. The 3 trillion the US spent on the IRAQ, how much renewable generation capacity would that have built?

  11. mugwump
    March 21st, 2008 at 10:22 | #11

    Until all the fossil fuel subsidies are removed ($10 billion per annum in Australia)

    As I have pointed out before, claiming roads as a fossil fuel subsidy is nonsensical. You may as well call them a steel subsidy, or a rubber subsidy; after all, both are ingredients in cars. Roads are required whatever energy source powers our vehicles.

  12. March 21st, 2008 at 10:41 | #12

    Salient Green your point about people having “too much money” is also part of the problem. In an age of abundance price loses its impact. We are going to consume energy and the ONLY solution is to produce enough green energy to meet our needs. Fortunately there is plenty out there and the running costs are already half the cost of burning fossil fuel. The problem is getting the investment or money to build the plants.

  13. Salient Green
    March 21st, 2008 at 11:00 | #13

    Kevin Cox, I just went to your website and understand and believe in it. Looks good to me. But do the Ross Garnouts and Penny Wongs and Peter Garretts know about it?

    Ikonoclast, I don’t know where all those fossil fuel subidies are used now, but $10 billion per annum would buy an enormous amount of upgrades and conversions to existing coal fired power stations to increase efficiency. Things like solar thermal preheating, co-generation, combined cycle and eventually, possibly, carbon capture.

    As for the US, I’ll just leave this link to some interesting facts about trains.
    http://www.energybulletin.net/31824.html

  14. March 21st, 2008 at 13:15 | #14

    Salient Green,

    Thanks for taking the time to look at the website and even more in believing:)

    We are making progress and I keep lobbying and trying to get people interested. I send emails regularly to different minders of different politicians. I have 20 suggestions into 2020 and put in submissions to Garnaut and to other places that ask for them. I apply for grants, make suggestions to governments on how they can save lots of money. I put up entries on blogs and write letters to newspapers. (You might send an email to Wong and Garret suggesting they take a look at rewards:)

    Luckily our other business http://www.edentiti.com – which has a different approach to identification – is starting to take off and its success will give us more credibility. People will not support a new idea until others support it and unless it comes from a credible source.

    Ideas go in and out of fashion. Humans are naturally and very sensibly conservative about change. I learned a valuable lesson the other day when we asked a focus group what would it take for them to trust our identification system. The answer was “if they saw it advertised on TV”. People do not have the time or the inclination to evaluate every idea that comes their way and they need shorthand ways to decide. Politicians and other decision makers are overwhelmed by ideas and they have to have efficient strategies to evaluate them. If an idea becomes well known and a few opinion leaders are convinced it is worth a try then the decison makers will consider it – but not before.

    We have been relatively laid back about the idea and not pushing it hard but I started to get worried when I realised it was going to take two years to get emissions trading underway and even longer to see it doesn’t work very well. I am convinced emissions trading will not work quickly enough and we need to consider and try other approaches because time is running out.

    My thanks to Prof Quiggin for giving me a forum. If the idea gets taken up then it will be due to this forum and others like it.

  15. conrad
    March 21st, 2008 at 14:26 | #15

    “The only way to seriously address that is for everyone to have an allocation of emissions, above which you will have to pay some big money”

    Maybe you haven’t noticed, but micromanagment of hugely complex systems almost never works (go ask an older Russian), especially when any such measure is extremely easy to cheat. In addition, I doubt its possible to even come up with a reasonable definition of this or what should even be included that any reasonable percentage of the population would agree on. Is food included? Do I lose or gain on this measure if I have children etc. Of course you could prove me wrong on the latter point and I’m all ears for it.

  16. March 22nd, 2008 at 04:38 | #16

    Conrad,

    You have hit the nail on the head on why carbon trading and emissions permits will be ineffective.

    Any system that takes two years to define is an example of micromanagement. The proponents of emissions trading are defining a new emissions permits market so that perhaps some money will be spent in another existing market place of renewable technologies. How silly is that when all that has to be done is to direct funds to the existing market place. (Perhaps ridicule is the best way to stop emissions trading)

    The solution is to put in place a system with few rules but that will evolve. This is done by changing bottom level transactions in simple enforceable ways.

    What we have done in Rewards is put simple restrictions on some money and work out how to enforce the restriction. “For some reason some people will get some money but it has to be spent in the existing market place on ways to reduce greenhouse gases”

    We have a method to ensure money is spent on a given class of goods through an existing market place. Enforcement is achieved by the market place participants all applying to participate. When they apply they agree to the market place rules. If those normal commercial contractual rules are broken then the offenders are thrown out of the market place.

    The principle can be applied to other areas of community expenditure. Our approach is for a community to decide the resources to be spent in a particular area and then to let an existing market place decide the most efficient allocation.

    Governments now decide the resources to allocate to what areas but they micromanage how the money is spent, mainly because they are quite properly concerned that money is spent where it is supposed to be spent.

    As it is the way most governments spend most taxes it is a reason why taxes are unpopular. We can all see the waste and inefficiencies as our bureaucrats struggle with the difficult (impossible?) task of deciding HOW to spend money efficiently and with probity instead of letting a marketplace decide.

    I have no idea how the GHG problem will be solved in terms of whether the solution will come from solar or nuclear or geosequestration etc. All I know is that with Rewards it will be solved and it will be done in an economically efficient way and within whatever time frame we decide.

  17. March 22nd, 2008 at 07:41 | #17

    i love to read ozzies on politics. there may be good ideas there, but it doesn’t matter: none of you have a vote where it counts. oz is a nation in perpetual political adolescence, opinions without power. don’t you ever notice? of course you do, but you think it’s natural.

    right now, you’re just horses, as the pollies call you when they think you’re not listening. you can say “we are going to here, or there”, but you’ll just be pulling the coach on which your masters ride, and turning as they pull the reins.

    do stop saying “we decide..”, it makes your intellectual qualities suspect, as well as your understanding of political reality. it’s so easy to say “they decide..”, why not use this phrase and at least leave open your grasp of reality?

  18. John Quiggin
    March 22nd, 2008 at 09:42 | #18

    Al, I gave you a whole thread to present your case on this. Please wait until you have something new to say instead of repeating the same point.

  19. wmmbb
    March 22nd, 2008 at 09:58 | #19

    There is probably some established rejoinder to the contention, but because I do not understand currency trading preferences, I do not follow them. Prior to March 2003 it was suggested the real reason for the invasion was the intention by Saddam Hussein to switch from dollars to euros as the the trading currency for oil. The other country that came into contention in relation to switching from the dollar at that time was Iran. I would have thought with the blow out of the costs associated with the war, and the other factors that have weakened the dollar against the euro as a preferred trading currency, the likelihood of such a switch is now greater. Do countries from China to Dubai who have built up currency resevers in dollars have any other option but to buy American assets at bargain prices?

  20. Kevin Cox
    March 22nd, 2008 at 10:56 | #20

    I am giving a talk to a group on Tuesday who I am hoping to convince that water rewards is an idea worth supporting. Here are my notes for the talk. I would welcome any issues that you see with the idea and presentation that I should address.

    My background and credentials

    My first job was helping building a computer simulation model of the hydroelectricity system in Tasmania – I came into a team that had used paper simulations and was starting to use computers when they first appeared. The first simulations were done on the Siliac CSIRO and Uni of NSW computer. Later we used the WRE computers in Adelaide then our own computer that we purchased with the Tasmania University. I didn’t know it at the time but this established in my mind the way to design and build computer systems. First it was simulating a complex system. Later it was building complex systems with computers where the model becomes the system.

    When we modeled the water/electricity generation/dam system we built a model of interacting entities. Production information systems are systems that interact with each other and where people and organisations are part of the system – not separate from the system. Over the years I have spent a lot of time working on algorithms that optimise resources and that allow people to easily interact with computer systems. Examples are timetabling problems, manufacturing scheduling problems, and online search systems.

    The internet and the power of modern computers now makes it possible to build these systems to include many people and with many interactions. We have many examples of these including stock exchange systems, banking systems, electronic markets, google search, facebook, etc.

    I founded a company 3 years ago to make it easier for people to be part of the system by giving people electronic identities that can interact under the person’s control and be part of the electronic system. In other words we can build systems where each of us has a computer program (their electronic identity) to do the bookkeeping for us. With this we can now build systems to take better advantage of computers and the Internet. The system also allows organisations to have an “identity” and to interact with other organisations and people in a public way.

    This system is now working and is starting to gain sales. We now have an essential building block for building more complex and larger electronic economic systems.

    The system problem of resource allocation by governments.

    When a government or a community decides to do something together it allocates some resources (money) and then spends those resources on the common good. The problem arises on how to spend the money efficiently and with probity.

    Rewards systems solve the problem of spending public funds efficiently by using existing market places and giving the public the money to spend in the market place. The market place of goods solves the efficiency problem. Probity is created through the system of spending the money and determining probity before the money is spent. Compliance is handled by excluding both buyers and sellers from the market place if they disobey the rules. Distributing the money fairly solves the equity issue and social contract issues.

    Let us see how it works with water.

    The problem is getting investment into ways of saving water and creating new supplies. There are market places where a buyer can invest but there are no investors because water is too cheap. The traditional solution is to put a price on scarcity so that water is no longer cheap. This may or may not work but the evidence that it works is not good for both rural and urban water supplies.

    The Rewards solution is to give buyers some money that they have to spend in the market place of saving water and creating new supplies. We know this will work.

    Theoretically this can be done by giving the money to a government authority and requiring them to spend the money in the market place. However, because there is only one buyer – who is often the seller – there is no market.

    A fair way to give out the money is to give it to the low consumers of water. A fair way to get the money is to get it from the high consumers of water by putting a surcharge on water.

    How do we establish the sellers? Let any person or organisation that has a way to save water or increase supply put their wares in the market place. Let them assert how expenditure on their products or services will save water or increase supplies and make them prove that buyers achieve the savings or increase in supply. If they cannot then ban them from the market. Similarly if buyers cannot prove that their purchases saved water or increased supply then they are never given any money again.

    We also allow people to buy and sell Rewards for less constrained money. The discount on Rewards tell us how well the actual price of water reflects the value of water. If Water Rewards can be purchased cheaply then the price of water is too cheap. What we need to aim at is to increase the price through a surcharge on water until Rewards can be sold at a small discount. When this happens then we know we have the price about right in relation to other uses of money. It is expected that the surcharge on water will reduce when we have sufficient capacity.

  21. Ikonoclast
    March 22nd, 2008 at 12:26 | #21

    Here’s a Howard policy Rudd must reverse. It’s voluntary student unionism. Another disaster courtesy of the neocon economic “rationalists”.

    http://www.abc.net.au/news/stories/2008/03/20/2195426.htm

  22. March 22nd, 2008 at 14:16 | #22

    If you missed Desert Heart last Tuesday it’s on Artscape again at 7:00 pm on ABC2 tomorrow. One of the artists, Lydia Balbal had a gallery opening on Thursday in Broome. Please see Desert Country for details. Truly inspiring indigenous story.

  23. cicero
    March 22nd, 2008 at 21:23 | #23

    Kevin at 5

    It’s not clear to me how your proposal would bring about a significant reduction in GHG emissions for electricity production. I think you would agree that most electricity users buy electricity without much thought as to how it is produced. They just want it to be as cheap as possible. They would not buy green electricity if it were more expensive than electricity sourced from coal.

    The situation is fraught because coal is a cheap source of electricity and there is more than enough coal to fry the planet. We need a strategy that will lead to a significant reduction in carbon emissions. How can this be done without explicit carbon emission penalties that are high enough to bring clean coal and green electricity alternatives into play?

    I think you are suggesting that your proposal would create an environment that facilitates growth and innovation in the supply of green electricity, hopefully at a cost that is less than the cost of electricity derived from coal.

    Does your proposal only work if the hoped-for green electricity cost reductions can be achieved to make it more competitive than coal? What would happen if the coal industry came up with a new technology that allowed electricity to be produced at even lower cost (but with the same carbon emissions)?

  24. Peter Evans
    March 22nd, 2008 at 22:02 | #24

    I predicted back in January an Obama/Richardson ticket for the Dems in the US, and that it would win 40 states in November. I feel increasingly confident…

  25. Peter Evans
    March 22nd, 2008 at 22:03 | #25

    back in January, on this very website!

  26. March 23rd, 2008 at 04:07 | #26

    Cicero,

    The main cost of renewable energy is the cost of capital to build renewable energy plants. Current estimates are that for both geothermal (http://www.geodynamics.com.au) and solar thermal (http://www.ausra.com/) the capital cost is $3000 to produce 1kw CONTINUOUS power or about 9,000kwh per year. Coal fired and gas fired stations are much less and are of the order of $1500 for 1kw continuous.

    However, the running costs of coal is of the order of 2 cents per kwh and of geothermal and solar thermal is 1 cent per kwh.
    Capital costs, taxes, transmission costs, distribution costs, billing costs, profits bring the retail cost up to 10+ cents per kwh.
    All these except capital are about the same for all forms of energy.

    The cost of saving energy is often a lot less than the retail cost of energy but businesses typically do not bother because they “have better things to do with their money” (but that is another story)
    The proposal forces investment in renewables because there is money available that can only be spent in the market place of savings or renewable infrastructure.

    If you have money that can only be spent in a particular market place then you will spend it to get the best return in that market place so it will be spent efficiently.

    Even if the running costs of renewables was greater than the running costs of fossil fuel burning plants the power produced would still have a market because the price of production is a fraction of the retail price.

    Rewards themselves can be sold and the price in terms of unconstrained money will indicate the capital cost of the proposal. If the discount is very high then that will show that the total cost of renewables, including the cost of capital, is more expensive than fossil burning energy generation. If there was no discount then there is no need to force investment so we have an inbuilt mechanism for knowing when to stop Rewards.

    Emissions permits, carbon trading, carbon taxes all increase the price of polluting energy for the purpose of encouraging investment in renewables. The approach suggested is to force investment by budgeting some money that can ONLY be spent on investment in the market place of ways to reduce GHG.

    To reduce GHG we have to invest in GHG reducing infrastructure be it saving energy or generating energy or finding ways of sucking GHG from the atmosphere. The proposal is an alternative to forcing investment for GHG reduction through artificial indirect manipulation of prices in markets other than the market where we want expenditure.

    My rough conservative calculations says that a 30% surcharge on the retail price of energy guarantees enough investment to give us zero net emissions in 10 years. Put another way – if we moved 70% of current energy taxes to Rewards we would have no price increase in energy and are guaranteed to have zero net GHG emissions in 10 years. Put another way we can have zero net GHG emissions with energy generated for half the current cost. Put another way we can have zero net GHG emissions and pay for it in a socially equitable way.

    The challenge is still out there. Tell me why it will not work.

  27. conrad
    March 23rd, 2008 at 06:29 | #27

    “Here’s a Howard policy Rudd must reverse. It’s voluntary student unionism.”

    Did you read the article suggested Ikonoclast? The two main complaints were that food had been outsourced, and that sport was more expensive. My memory of many universities before food was outsourced is that was expensive and poor quality, and I can also see no reason why some students should subsidize others to play sport.

  28. March 23rd, 2008 at 09:25 | #28

    Conrad,

    The reason why there should be compulsory student fees for extra activities is because if you go to a University then the value of extra activities outside study is higher the more participants. Universities are not just about learning but are about a total experience of living, playing and social interaction with others and hearing their stories. Compulsory fees encourages all students to participate and everyone benefits.

    If you think Universities are about training then forget about compulsory fees. If you think Universities are about learning from others – particularly your peers – then compulsory fees for all are a good way of getting value for money.

    If you have to pay fees and you do not want to participate in any of the activities that are supported then you can always start an activity of your own that you like and lobby for support.

    To solve the problem I would suggest a compulsory fee but allow part if not all the fees (including your share from the University coffers) to go to activities you think worth supporting. It is not the fee that is the issue. It is how it is spent. It could be solved through a “Rewards” system. Perhaps we can take on union fees after we solve global warming:)

  29. Donald Oats
    March 23rd, 2008 at 11:02 | #29

    Back in the pre-HECS days (thanks Gough, boo-hiss Dawkins) we all paid the compulsory student union fee. Our common complaint at the time was the “why are we paying for clubs I’ll never use?”

    Down the track, the unanticipated benefits were clearer. For example, clubs bring together otherwise disparate groups of people; if a couple of your friends are in say the footy club or the rogaining club then your own social circle broadens through meeting the other club members, and so on. Pretty quickly exposure to people across the spectrum of political and intellectual landscape happens. As it turned out, through friends made via these sorts of social webs I ended up making good use of some of the clubs myself – and gained lifelong friends and professional associations along the way.

    Taking too extreme a view on these sorts of things (compulsory union fees) can lay waste to the good without necessarily addressing the bad. If the ideology position of a union fee was such a problem for Howard et al, they could have kept a compulsory funding of clubs as part of the HECS fee system (for example) and excised the union part of the equation. [Pity about that other ideology idolising the individual above all else irrespective of context - perhaps that's why any sort of compulsory funding was not to be.]

  30. conrad
    March 23rd, 2008 at 11:53 | #30

    Kevin and Donald,

    the days of Australian universities being sites where people interacted in the way you are talking about have long gone. Almost all students now just turn-up to classes and leave (some not even that given the trend toward online education). Given this, your arguments, which may have been appropriate two decades ago, are not especially appropriate these days.

  31. Ikonoclast
    March 23rd, 2008 at 12:26 | #31

    There are many areas of life where we accept a degree of compulsion as part the price of living in and benefiting from society. Voting is compulsory. We are compelled to register our cars and get drivers’ licences before driving on public roads. We are compelled to serve on jury duty unless we have an adequate reason to not serve. Etc. Etc.

    Compulsory student “unionism” fees were of the some ilk; a compulsion but also a benefit to all.

    As John Ralston Saul said; “Rights are not free standing without responsibilities.” We should not allow “free” market machinations and “libertarian” selfishness to fracture and atomise our sense of community.

    John Howard always played the divide and conquer card. Atomised individuals are no match for the power of capital and that’s just how the plutocrats like it. Don’t let them manipulate your thinking.

  32. Donald Oats
    March 23rd, 2008 at 13:46 | #32

    Re #6 Salient Green @ Mypolonga – I used to do the fruitpicking etc deal at Mypo during the university vacation periods (back when “we” won the America’s Cup or thereabouts). Still have trouble looking at a bag of dried apricots in the shops :-) Bill O’Brien and his wife gave a few of us poor uni students a bit of a break back then, letting us work their property for fairly decent pay (by the case) during the holiday periods. Hard yakka but was all good fun!

  33. conrad
    March 23rd, 2008 at 14:25 | #33

    Ikonoclast,

    simply stating that some things should be collectivized and that some will lose and others will benefit is not in the least bit convincing since you could use that argument for anything and everything (e.g., food). Thats why you need case by case arguments. At present your argument basically reads like this if I fill in the blanks for you: Middle class kids should be forced to subsidize other middle class kids to play sport and eat union food (which is invariably more expensive and of poorer quality than what the private sector provides). In addition, the small percentage of people that go to university who don’t happen to middle class should have their child-care expenses subsidized by other students, and not, say, the government.

  34. March 23rd, 2008 at 18:55 | #34

    If you were a risk-averse American, looking to park you money safely until this credit crisis passes, where would you put your money? The stockmarkets are down and still very volatile, the real estate boom has bust, and interest rates are low with further to fall. Commodities perhaps? Gold, Oil?

    In Australia the answer is easy. Just put your money in the bank and get 8 per cent on it.

  35. March 23rd, 2008 at 18:56 | #35

    Conrad,

    The problem with your view and the whole mindset that emphasises individual choice is that it ignores and dismisses those of us who want to cooperate.

    I can argue that by not having compulsory union fees that you are denying me a “complete” University experience because it is one of those things that is one in all in or else it does not work. It is not good enough to say that I have a choice of joining any societies that I want. The fact is that the societies and sports club will not exist if we have to depend on individual choices because people will not join if others may not join.

    The compromise that an individual must pay the fees but they have a choice where to spend the money will work and although it will not completely satisfy you it is workable.

    It is not just union fees but it covers most aspects of our community economic life and hence it is an important issue beyond union fees.

  36. March 23rd, 2008 at 19:37 | #36

    Commodities perhaps? Gold, Oil?

    Answering my own question, clearly not gold and oil which plunged around 10% last week.

    But that still begs the question, how would an American preserve their wealth at the moment? Real interest rates are negative in the US, inflation is rising, the USD is in the toilet, equities down, are real estate down, commodities down … where do you turn?

  37. March 23rd, 2008 at 19:45 | #37

    RE: Kevin Cox’s “edentiti rewards” proposal:

    Tradeable Energy Quotas (TEQs) are another idea:
    http://en.wikipedia.org/wiki/Tradable_Energy_Quotas

    Monbiot is quite a fan of TEQs

  38. Ian Gould
    March 23rd, 2008 at 19:54 | #38

    “If you were a risk-averse American, looking to park you money safely until this credit crisis passes, where would you put your money? The stockmarkets are down and still very volatile, the real estate boom has bust, and interest rates are low with further to fall. Commodities perhaps? Gold, Oil?”

    Probably into some form of commodity-linked investment denominated in Euros, Pounds or Yen and paying a regular dividend.

    Is Rio Tinto still listed on the London exchange?

    To get a little exotic – a gold loan fund.

  39. Ian Gould
    March 23rd, 2008 at 19:57 | #39

    Sorry hit the button too soon.

    A gold loan fund has a stock of gold, it lends the gold out primarily to gold miners. The miners sell the borrowed gold, and then repay the loan in gold over the term of the loan (plus interest, of course).

    The attraction of a gold loan fund over physical gold is that it should have a regular income stream from the interest payments while allowing you to still participate in any upside from the gold price.

  40. Jill Rush
    March 23rd, 2008 at 23:21 | #40

    Easter provides a luxury of time unknown during the rest of the year. The combination of four days without pressures because business isn’t open is a rare commodity. IT is a time to reflect on our lesser selves.

    I used the time to go and see “The Black Balloon” – a challenging movie which was well worth the money and the effort. It is rare to have a movie which presents an experience which rings true and reveals a part of the country that is both good and bad. Rare to have an engaging movie without sex or gun fights or a car chase.

    Well acted, tight story and showing the real Australia. Worth a visit if you have the time to see the good and bad of this country in the form of an entertainment.

  41. March 24th, 2008 at 06:20 | #41

    Carbonsink,

    Tradeable Energy Quota’s like any form of artificial financial product have implementation problems because they are property and we have to define property rights for them. It appears that the long delay in getting emissions permits trading going is largely to do with property rights and all the legalities and regulations etc. that they require. From the point of view of implementation it is much easier to build on something we already have. Rewards are just a restriction on money and we already do that all the time in other contexts.

    However, varying what we can do with money has its problems and when we start to create new products from money like financial derivatives then we can get ourselves into a real mess – refer to the current world financial situation where we have created financial products whose value exceeds the total world production in one year by 10 times and yet we have little idea of the risk associated with these financial products.
    With Rewards we do not invent a new product only put a restriction on an existing one. This makes it relatively trivial to implement because there are no new regulations to put in place. Everything “legal” can be done within existing contract law.

  42. conrad
    March 24th, 2008 at 07:28 | #42

    Kevin,

    you are confusing cooperation in general with the role of universities. My suggestion was that you should come up with university specific arguments (for which you have offered none, aside from selfish ones — i.e., you should pay for me) as to why you want other university students to foreceably pay for your own personal hobbies and poor food taste (if you eat union food). My argument is that these sorts of things are simply not in the role of many universities, who’s role these days is basically teaching and research. My university, for example, has pretty much given up on supplying food (it mainly rents out space), because it is done far better by all the little private operators. IMHO, because of this, and because of the location, we have the best food choice of any university in Victoria (possibly Australia, but I haven’t been to every university)

    On this note, what you are asking for is all publically available. What I mean here is that if you want to play sport, eat good food, or join some sort of club, why should these be run by a university, which inherently excludes most of the population from joining? I can’t see why these sorts of activities _must_ be run by universities, when there are ample numbers of clubs open to the public where anyone and everyone can join and cooperate with each other.

  43. Ikonoclast
    March 24th, 2008 at 07:45 | #43

    We do not need to do anything complicated in relation to the energy markets. The correct steps would be simple, equitable and effective and therefore they will never be taken by any government. The steps are;

    1. Cease all energy subsidies.
    2. Implement Carbon pollution taxes.
    3. Compensate the poor through the welfare system.

    There would however be significant adjustment pain over a number of years. The adjustment would have to be progressive as our economy is “addicted” to cheap, subsidised fossil fuels.

    Perhaps that last statement gives the lie to my use of the word “simple”. Logically the solution is simple except for the issue of momentum. The current system has too much momentum in the wrong direction. Politically, the solution is (probably) impossible. There still seems to be no will amongst politicians or the people for any real action.

    I guess we shall have to wait for the laws of physics to correct the sytem since the “laws” of governments and markets cannot.

  44. March 24th, 2008 at 07:55 | #44

    Ross Gittins past two articles in the SMH have talked about the fairness in fair trading. That is, we exchange goods and services freely when we can trust the other side to do the right thing. This trust is part of what we call social capital.

    When we designed Rewards we set out to bring “fairness” to the exchange of money from the community to be spent on community goods. We wanted a system that brought the principles of free and fair trading to the expenditure and collection of money for community purposes.

    It is my belief that governments and taxes are unpopular not because people object to the collection of money for community purposes – in fact they welcome it when it benefits them – but because they are losing trust in the fairness of the system.

    People lose trust when they lose control and they are asked to trust others who make the decisions on the allocation of resources. This becomes very problematic when they see those who they are meant to trust telling them lies and half truths and when it becomes obvious that politicians of all persuasions use taxes to buy votes.

    Rewards is meant to help bring back trust into public expenditure. It does this by making the collection and distribution of some funds transparent and fair and giving the community more control. In bureaucratic terms it makes a virtue out of hypothecation.

    Water is an example. In Canberra we are being asked to pay a lot more for water to fund the building of dams and/or recycling plants which will then be owned by the government who will then continue to charge monopoly prices and use the money collected for other purposes over which we have no control and have to trust the government.

    This fails the fairness test of trading.

    Emissions permits trading – even if it worked in terms of directing expenditure to renewables – fails the fairness test. Everyone will be arguing about who gets the money from selling permits and no one will be satisfied because it is an impossible task and we do not trust governments.

    However, everyone understands that is fair that those who produce few GHG emissions get some Reward particularly when they have to spend the money on ways to further reduce GHG emissions. This is a fair and transparent trading and is why Rewards will work. It will not only work but it will build up social capital.

    We can also use the same principles to design an international system to make it worthwhile for other countries to join similar schemes. That is, rather than worrying about competitive advantage we can design systems that give us cooperative advantages over those who do not join.

  45. jack strocchi
    March 24th, 2008 at 08:01 | #45

    I attended a Mass at the Corpus Christi hospice admininstered for those in need of palliative care. Very moving it was to see people waiting at death’s door hanging on to dear life and clinging to some shred of hope. The pastoral carers carried themselves very gracefully.

    Soured me on atheists a bit more, they seem mostly interested in more efficient forms of euthanasia. Their lack of rituals to sanctify rites of passage is also painfully obvious.

    Also reinforced my aversion to militarism and attraction to legalism as a way of settling our differences. More money to spend on getting well soon.

  46. Ikonoclast
    March 24th, 2008 at 10:33 | #46

    I am an agnostic. I always find myself astonished by convinced believers and convinced atheists alike. Most people seem so very certain one way or the other. I feel completely uncertain. I do not see how I can possibly know what are the fundamentals behind existence.

    That God should exist seems impossible to me. Yet that the Universe should exist and that God should not exist also seems impossible to me.

    To my question of “Why should things exist?” an athiest acquaintance said to me, “It’s the default setting.” This is an amusing reply however a “setting” is usually “set” in some way. Thus how was the setting set?

    In a sense, even to a non-believer in the sentient god hypothesis, the Cosmos (our known universe) is something with seemingly god-like powers. It is;

    (a) existent apparently without cause
    (b) rigourously consistent in its basic laws
    (c) able to generate life and consciousness in some manner (apparently from matter-energy).

    This incongruous duality of “inert matter” and “living matter-consciusness” ought to give militant atheists some pause for thought.

    However, followers of the monotheist religions seem to be following ancient myths which are now thoroughly and scientifically debunked at least in their literal interpretation. That ought to give them pause for thought too.

    Unfortunately, there are fundamentalist believers on both sides of this divide. Where we can all agree perhaps is that “truth” exists. (I prefer not to capitalise it.) I mean truth in Karl Popper’s sense;

    “The progressive correction of error assures us of the existence of truth.”

    Perhaps the most lamentable aspect of modern discourse – in the US anyway – is the repetition of old saws like, “I am a person of strong beliefs” & “I did what I believed to be right.” G.W. Bush uses forumalations like this very frequently.

    I think it is abominable reasoning to hold up “belief” as a justification for any major action. What is worse, it is so often held up an exculpating factor after an action has been proved wrong. Actions must be based on facts (where they can be ascertained) and reasoning. Where uncertainty exists – as it often will – it should be admitted and great caution should be displayed before acting.

    At times, I tend to agree with W.B. Yeats;

    “The best lack all conviction while the worst
    Are filled with passionate intensity.”

  47. Salient Green
    March 24th, 2008 at 11:37 | #47

    Donald Oats, thanks for the laugh, and the memory of Bill and Rita, lovely people who have sold up and gone to I don’t konw where.

  48. cicero
    March 24th, 2008 at 13:39 | #48

    Kevin

    Thanks for your response. I now appreciate how the reward scheme helps to shift capital expenditure towards initiatives that reduce GHG. I am coming around to your position.

    A couple more questions:

    I can see that the proposed surcharge creates a pool of funds for investment in GHG reducing projects. What is the process that ensures that these funds are used to achieve the best pay-off in terms of GHG reduction? Do the organisations seeking funds from the pool effectively bid for the funds by offering projects that reduce GHG by x units for $1 million? The evaluation of such bids would require considerable expertise. How are the winning bids selected?

    You suggest: “My rough conservative calculations says that a 30% surcharge on the retail price of energy guarantees enough investment to give us zero net emissions in 10 years.� What role does coal have in the generation of electricity in 10 years time under your proposal?

  49. March 24th, 2008 at 14:57 | #49

    Cicero,

    One of the features of the approach is not to try to “pick winners”. We let the market do that. The system allows any seller of products or services that produces infrastructure to reduce GHG to put their product in the marketplace They make their claims, put it up and see if people will buy it.

    You will then say – “but we will not get the greatest reduction for our money”. Maybe, maybe not that is not the point. One feature of good markets is not that you necessarily initially get the best value but that you allow innovation to flourish. Remember the people who have been frugal are the ones who are voting with their money and I think we can trust them to “vote” wisely.

    Sellers have to say how their products will save greenhouse gases and buyers have to say they will use the products they buy to save GHG. If in the future it is shown that they were lying or stretching the truth then we do not punish them – we just exclude them from the market. The sellers can no longer sell and the buyers no longer get any more money. That is they are excluded from the game.

    One of the criticisms of the approach is that it does not have a measure of how much is being saved. If this proves to be a problem then we adjust the market in some way. However, I am a believer in not worrying about problems until they arise and then seeing how to adjust if necessary. My guess is that we will not have to worry because I think both buyers and sellers will play the game.

    We also take our inspiration from the way modern information systems are built. The great systems of the world were built from small beginnings but were built to evolve. The great failures are those that people attempted to designed in full. The modern wonders of the information systems world like MS Windows, Google Search, EBay, Unix, Java, online banking, evolved. They all started small and developed. It is why so many great systems come out of garages. Governments and big business try to create big systems and they almost always fail. Just look at the Sydney ticketing system to see a recent example. I predict that emissions permits trading will be the next example if we are foolish enough to go this path.

    If we get the chance to implement Rewards we will start small – one or two suburbs – and we will try it out and see what happens – but we will build it so that it is scalable and easily be deployed.

    The magic of markets is that they operate a bit like the DNA of economic systems. When the first bit of DNA was created or evolved or whatever there was no great plan. The amazing abundance of life forms was not designed – it evolved. Markets are one of the building blocks of human society and treated right they will evolve to create the economic and social structures for following generations – who can then do their bit.

    I’m not sure how far we can take the analogy with life forms but it is nice way of thinking about the problem and it leads to some interesting ways of viewing problems.

    So my answer about coal is I don’t know and I don’t care that I don’t know:)

  50. Donald Oats
    March 24th, 2008 at 17:03 | #50

    Hi Ikonoclast: I have been an atheist for most of my life: apparently when I was quite young it was agreed that “I was not really suited to Sunday School”, at least from the church’s perspective.

    For a little while I wrestled with the issue of describing myself as an agnostic versus atheist. As no doubt you appreciate, I cannot absolutely ever rule out the possible existence of something that we might eventually agree is a god. But then, many other facts of life have that same lack of proof yet are relatively unchallenging to decide upon as real or unreal. Logic is great once we have fixed our assumptions, but not much help in deciding which assumptions “are true” in the first place. Which leaves us with the thorny issue of at what point do we make a decision, based on the information before us.

    For me personally, I am an atheist in the sense that I am at least as confident that there are no gods, as I am of my own eventual death (and taxes…). I feel no discomfiture in having decided gods don’t exist (or in the fact that I have decided I will eventually die), and in acting accordingly. Should I meet a god, I will engage in my own Kuhnsian paradigm shift, no doubt.

    Let me stress I am not attempting an argument as to whether gods do actually exist or not. I am merely explaining that I am happy to be considered an atheist because I have decided that the facts (which I’ve not discussed here) are enough for me to view the statement “Gods do not exist” as at least as likely to be true as “Don will eventually die”. BTW, if I don’t die I expect some worshipping to be going on :-)

    [No philosophers have been consulted or harmed in the making of the above text.]

  51. Will
    March 24th, 2008 at 21:42 | #51

    Now that there has been a few year’s experience, and the initial gee-whiz of technology has worn off, I would be interested in other’s opinions on the real educational value of online teaching, especially where it offered (or at least perceived by students) as a substitute for class attendance.

  52. March 28th, 2008 at 15:06 | #52

    Will

    I wrote my first instructional program in the late 1970′s. It was a program to teach touch typing as Computer Aided Instruction on floppy disk. The lessons we learnt with that program still apply today.

    We would give the program free to anyone who asked for it if they wanted to learn to touch type just from the disk and paper instructions. About 10% completed the course even though they all “wanted” to learn.

    We sold it to some government departments who used it to train their employees in a semi structured environment. They were given an introductory session and then came back each week to show how they were progressing. 50% learnt to touch type.

    We used it in a writing course in an educational institution where students had to learn to touch type to pass the course and we did the same as the government departments in terms of the instructions. 100% learnt.

    It is not whether it is online teaching or the content that is important. It is the social environment and reward structures that you create that make the difference.

  53. SJ
    March 28th, 2008 at 21:27 | #53

    Will, the gee-whiz hasn’t worn off.

    There’s been a long history of things variously called correspondence courses, distance education, etc. There’s been an ongoing argument about whether these things are as good as class attendance. For some people it works, and for some it doesn’t.

    For want of a better term, “webbising” the teaching material makes things easier for both face-to-face and students and distance students.

    The distance students get access to the lecturer via email, and any face-to-face students who miss a lecture aren’t disadvantaged.

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