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Monday Message Board

February 28th, 2011

It’s time again for the Monday Message Board to resume. Post comments on any topic. As usual, civilised discussion and no coarse language. Lengthy side discussions to the sandpit, please.

How are people finding the site’s response time at present. It seems to me to have improved, but I’m still looking at options

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  1. John Street
    February 28th, 2011 at 10:53 | #1

    I am whole heartedly in favour of a carbon tax. As Professor John Freebairn said some time ago, something like: it is the most honest way of dealing with the problem. And I applaud Julia Gillard for a bit of honesty – there is no avoiding the truth that it will raise prices.

    However, the compensation issue seems to be quite intractable.

    Could the government reduce the GST to compensate? If $5 billion (for arguments sake) were to be raised from the sale of carbon permits, could the government reduce the GST to 9 percent? This would reduce GST revenue by about $5 billion. The state governments could be compensated with the carbon tax revenues.

    The political point scoring advantage of lowering the GST to compensate would be that the government would be rolling back John Howard’s great big new tax. The government could also argue that it is not the money that it wants, it just wants to fix the price signals.

    Since the GST is a somewhat regressive tax: it hits the poor hardest: GST rollback would provide compensation where it is most needed without messing up the price signals and without complicated arguments about targetting the compensation. A reduction in GST would generally lower prices to consumers more or less offsetting the price increases caused by the carbon tax.

    As for exporters, I wouldn’t tax them until we get international agreement on a carbon trading system. Or perhaps implicit carbon taxes could be rebated on exports.

    Imports? I know we have fought hard for free trade, but is there a case for a carbon tax on imports not carbon taxed in their country of origin?

    Now I will admit that I haven’t thought all this through and you can shoot me down in flames, but how else can we achieve fair and efficient compensation?

  2. Chris Warren
    February 28th, 2011 at 11:31 | #2

    Nuke waste dump looms

    On 22 February 2011 the House of Representatives smashed a boot onto the body-politic of Australian indigenous people in the Northern Territory by passing a Bill to establish a nuclear waste dump on aboriginal land.

    If nuclear waste was safe – as our nuclear pundits constantly lie (Pell-like) – then why not have the waste dump in Canberra. Parliament house has a huge strengthened bunker quite suitable for storing nuclear waste. It would assist warming the building in winter.

    Why not place storage canisters of (so-called safe) on public transport to help warm passengers in winter?

    Maybe the pylons of Sydney Harbour bridge could be rented for nuke-waste storage, if it really was so safe?

    Why truck waste thousands of kilometers to dump “safe” materials on aboriginal land?

    If waste is safe, then why not store it in every electorate office of the parliamentarians who have voted-up this outrage.

    The only reason the NT aboriginals are going to cop this dump, is because they are politically weak, poorly resourced, and have always served as victims. This latest act just adds to their plight and the infamy of Australia as a civilisation.

  3. Jim Birch
    February 28th, 2011 at 12:20 | #3

    @John Street
    GST is regressive but it does actually have some good points too, eg, it taxes consumption, it is relatively difficult to avoid, and it’s more-or-less accepted. I’d be sorry see it reduced.

    I’d rather the government just gave it back to households directly or bumped the tax free threshold and pensions, or something along these lines.

    The tax should aim to increase the financial impact of high CO2 use choices. It has to hurt some people to work even if it is revenue neutral overall. It’s a pity to see petrol excluded but getting anything off the ground is a positive.

    Charging CO2 tax on imports seems to me to be desirable and possibly a critical part of getting a global CO2 tax up depending on how international agreement fares. It’s a classic free rider situation and might eventually warrant a punitive component for countries that aren’t paying their part.

  4. may
    February 28th, 2011 at 13:27 | #4

    might be of some use in the discussion?

    http://www.pik-potsdam.de/news/press-releases/eu-klimaziel-weniger-co2-emmissionen-koennten-mehr-wirtschaftswachstum-ausloesen

    from
    Postdam Institute for Climate Impact Research.

    way above my head but not above yours.

  5. may
    February 28th, 2011 at 13:29 | #5

    bloody hell. i got that from Daily Kos just now .

    does the institute exist ?
    i don’t think i copied the address wrong.
    apologies.

  6. John Street
    February 28th, 2011 at 14:09 | #6

    @Jim Birch
    Thanks for your comment Jim.

    WRT sorry to see GST reductions, I have no personal feelings about the GST up or down, but I would like to point out that GST taxes someone when they put in a solar hot water system and when they buy a more fuel-efficient vehicle, so to some extent GST also discourages actions aimed at avoiding the emission of CO2.

    WRT petrol. I am in favour of including carbon taxes on petrol usage. It would eventually need to be included in any serious scheme.

    WRT giving carbon tax back to households directly, I can’t envisage a simple or effective direct rebate scheme to households – so I would need further explanation of how that would work.

    WRT bumping the tax free threshold and pensions. I wouldn’t personally object, but all people who earn above the new tax free threshold would be paying more tax (and I am thinking that many would argue that they are already carrying a substantial tax burden, including the new flood levy). So a simple bump of the tax-free threshold would not be fair, it would make a carbon tax a tax on working families. So then you would have to adjust all the tax thresholds to fairly compensate. There might also be some people who already have incomes below the tax free threshold and who would like some compensation – perhaps students with part-time jobs or perhaps anybody who just earns a bit of pin money? With a GST rollback, these groups would to some extent be included but I do not see a compensation mechanism otherwise.

  7. Ernestine Gross
    February 28th, 2011 at 15:38 | #7

    @may

    Yes, the institute exists. Its web-address is: http://www.pik-potsdam.de/

    To get the article, look at the right-hand side of the web-site where you’l find the column headed “NEWS”, scroll down to the second item, headed “EU Climate Target: Less C02..” and click on this item

  8. Alice
    February 28th, 2011 at 18:12 | #8

    I dont know if anyone has managed to get hold of Stiglitz latest book “freefall” but it really is a beacon of clarity and a stinging indictment of the management of the US economy. Why Stiglitz isnt on Obama’s economic advisory committee, as opposed to major global bank representatives, is a complete mystery to me…

  9. may
    February 28th, 2011 at 19:49 | #9

    thanks Ernestine.

    am not a natural cybervore.

  10. stockingrate
    February 28th, 2011 at 22:09 | #10

    @John Street
    WRT compensation:
    As the carbon tax will for some time – if not always- be less than the future pollution externalities inflicted upon ourselves and others, I would suggest it is both prudent and just to transfer all the monies raised to the future.

    In further support of this transfer to the future I would note firstly
    that current GDP is driven by sale to foreigners of finite assets (coking coal, iron ore etc), and sale to foreigners of claims on the income from those assets (foreign debt, equity in QR coal, equity in mining companies, real estate, sale of visas and [with universities collecting the consideration in the form of student fees]) which have the effect of allowing higher consumption now at the expense of the future.

    Secondly I note the lack of allowance for bad things happening (eg lack of QLD infrastructure flood insurance, implicit taxpayer guarantee for banks, small personal savings/super balances) also implies overconsumption in the present and insufficient provision for the future.

    Reduced debt/increased equity held by Australians in the Australian economy would be great -mechanisms unclear. Future fund debt and equity would be great but no confidence would not squander it (on ourselves, now) through high wage high profit infrastructure “investments”.

    Perhaps restrict further selloffs and and use carbon tax monies to buy out vested interests.

    Adaptation expenditure would also be good- but difficult to trust community not to squander on pork.

  11. Christopher Dobbie
    February 28th, 2011 at 22:44 | #11

    I’m reticent to support this carbon tax and believe it will ultimately destroy a large swath of the Greens support base. There is no compelling evidence that markets are efficient and handing over yet another commodity (and being the ultimate one at that: energy) to bet on isn’t prudent at all. If a tax was set up to manufacture* a transition to renewables, sure I’d be on the bus but this will just spin the wheels while the coal still burns.

    * In the sense of a nation building all hands to the pumps transition, not this “support” via tax cuts and exemptions for industry groups interested in making a profit from installing a utility.

  12. Fran Barlow
    March 1st, 2011 at 06:27 | #12

    Abbott ‘begged’ for PM’s job: Windsor

    Tony Abbott on a number of occasions said that he would do absolutely anything to gain government – anything,” Mr Windsor told Sky News.

  13. gerard
    March 1st, 2011 at 09:07 | #13

    Wapo: In the first move toward phasing out part of Minority Leader Nancy Pelosi’s (D-Calif.) “Green the Capitol” program, polystyrene cups were reintroduced this week as an option for coffee drinkers in the Capitol Carry-Out, the building’s mini-cafeteria.

  14. Ken Fabos
    March 1st, 2011 at 10:53 | #14

    I think the Greens are sincere enough but a bit narrow minded with respect to solutions. Labor lacks the sincerity and would not be advancing a Carbon Tax now but for needing Green numbers. The Coalition is even less sincere about emissions targets than Labor, but if positions were reversed and they needed the numbers they’d probably be negotiating some form of Carbon price with the Greens.

    Gillard made a mistake by emphatically stating ‘no carbon tax’ during an election that was at least partly decided by voters concerned with climate policy; a reflection of Mainstream Media’s success in promotion of Doubt, Denial and Delay and lack of Labor commitment? Abbott is wrong to reduce such an important issue down to arguing ‘she said we said’ – and needs to watch his back as his recalcitrance on climate and emissions isn’t a position that’s beyond dispute within his Party. There remains the possibility that at some point Liberals will find their anti-science position is electorally untenable or even (unlikely as it seems) damaging to the future security and prosperity of Australia.

    Meanwhile I have serious doubts that any Government within Australia has the strength of conviction on this issue to do the minimum that’s necessary; we’ll get a watered down, compromised Carbon Tax that emphatically does not do anything that upsets the big users let alone miners and exporters of fossil fuels. Going by the rhetoric that is going around, gas is being touted as ‘the solution’, despite it being unable to deliver the longer term minimum reductions needed, yet the Carbon Tax will be promoted as a triumph if it sees some coal plants scrapped in favour of Gas. And if there is big investment in Gas, will any future Government be prepared to force the price of carbon high enough to make that ‘solution’ unprofitable?

    And what Gillard and co. are failing to push hard is that it the longer things are delayed the more costly – both in terms of investment in necessary change and in terms of direct costs arising from a changing climate. But I suspect Labor’s lack of backbone will means they may feel some relief if this round goes the way of the previous one and bogs down, delivering yet more delay.

  15. Jim Birch
    March 1st, 2011 at 11:38 | #15

    @John Street
    It’s not supposed to be fair, it’s supposed to push economic choices away from high CO2 use over time. There will be winners and losers, but that’s why the tax works. We need to get over that. (OTOH I think it is politically expedient to start small and ramp it up.)

  16. manchild
    March 1st, 2011 at 15:22 | #16

    @may

    I haven’t read the entire report, only the press release, so this could be wrong, but my initial thoughts are that the report is a little bit misleading.

    The claim is that stricter carbon targets will lead to higher economic growth (i.e. higher GDP). The mechanism through which this occurs appears to be:
    1. stricter carbon targets will force more investment in abatement technology
    2. at some point there will be a tipping point, where increased investment in low carbon technology leads to advances in abatement technology/cost improvements/economies of scale. Once this tipping point is reached a low emissions economy becomes a self-fulfilling prophecy as low-carbon technology is cheaper and better than old technology.
    3. GDP increases as we replace all of our old technology with the new improved low carbon technology.

    However, it is worth noting that this increase in GDP is caused by spending on investment (and not consumption goods). So there is more new green capital in the economy, but less (or at least not more) of the things that consumers want to buy.

    So GDP increases, but consumption (and therefore welfare) falls.

  17. Ernestine Gross
    March 1st, 2011 at 17:14 | #17

    @manchild

    Your statement “So GDP increases, but consumption (and therefore welfare) falls” is not true in general because you ignore employment and income distribution.

    May I direct your attention to the very first sentence of the press release you say you have read. It reads:

    “02/21/2011 – Increasing the EU’s 2020 greenhouse gas reduction target from 20% to 30% could help boosting European investments from 18% to 22% of GDP, leading to a GDP increase of up to €620bn ($840bn) and the creation of up to 6 millions additional jobs. These are the key findings of a report launched today. ”

    While the projected numbers require data and computations, the general result is not surprising for economists, manchild (well chosen name).

  18. Ernestine Gross
    March 1st, 2011 at 17:22 | #18

    The Potsdam Institute for Climate Research Impact – the website with which May (name) had some difficulties – has a new announcement since May posted here the first time. It concerns a three year international research project involving researchers from 21 countries and it has a EU funded budget of Euro 3million.

    For those who are still believing China and India aren’t doing anything in the area of greenhouse gas emission reductions, the following announcement by the Potsdam Institute may come as a surprise:

    “This Monday, the 21 partners from China, India, Japan and nine European countries from Greece to Great Britain are meeting in Potsdam for the first time.”

  19. Ben
    March 1st, 2011 at 18:38 | #19

    It’s hard to feel sorry for the Coalition on the carbon tax. They could have passed an emissions trading system, in any form they liked, using their Senate majority. Now there is likely to be a carbon pricing mechanism they really don’t like.

  20. Alice
    March 1st, 2011 at 21:01 | #20

    Seeing as the main discussion seems to be on the benefits of a carbon tax I have only two objections
    a) the damn mining firms should not have been let of the hook so easily
    b) the carbon tax should be progressive not regressive like the GST
    otherwise inequality will just rise further (and how much further can it go? Rising inequality causes political and economic instability. Something too many modern or should I say modelling economists seem quite happy to ignore even if the people affected dont).

  21. Donald Oats
    March 1st, 2011 at 23:50 | #21

    We wanted a price set on carbon, and we gave in to/embraced the CPRS solution at the 2007 election of the Rudd Labor government. It was a significant win, and yet the opposition used every nasty trick in the book to ensure that the CPRS would never eventuate. They sacked their previous opposition leader, Malcolm Turnbull, just when he was on the cusp of clinching a deal (that he had negotiated for months) with Labor. The MIA Liberal Andrew Robb mysteriously recovered overnight from major depression and managed to vote in the partyroom against Turnbull—one vote made the difference as Turnbull was rolled. The conservative part of the opposition is a small group, and yet they command such muscle as this. They have the audacity to complain about the Labor. Anyway, while Gillard told a porky, it was based on the assumption of Labor getting outright power; having to form a coalition in order to present a party with majority in the house of reps means that the prime minister and Labor must negotiate with the other minority party members before going ahead with the adjusted policies.

  22. sam
    March 2nd, 2011 at 01:50 | #22

    @John Street
    I don’t normally comment only to agree, I usually like to make an original contribution or none but in this case I’ll make an exception. This is an excellent idea. It automatically deals with compensation in a fair way, doesn’t increase the general cost of living, and is a perfect counterattack to all the silly coalition charges of a great big new tax.

  23. manchild
    March 2nd, 2011 at 06:58 | #23

    @Ernestine Gross

    More jobs (and more income) does not necessarily imply increased consumption. It cannot, unless there are more consumption goods are produced.

    Yes, there will be a multiplier effect following the initial surge in investment, which may cause an increase in production of consumption goods. And yes, it does depend on the specific parameters. But I would be very surprised if the multiplier effect was enough to offset the reallocation of resources from consumption to investment.

    Has anyone read the full report? Do they report consumption figures?

  24. Ben
    March 2nd, 2011 at 07:19 | #24

    @manchild

    How do you get “more jobs (more income)” without getting “more consumption goods”?

    ????

  25. Jim Birch
    March 2nd, 2011 at 09:10 | #25

    @Alice
    If we tax our coal miners and (say) China and Brazil don’t, aren’t we creaing a free rider problem?

    The preferable way of handling the the CO2 problem is via a universal carbon tax (or cap and trade system.) Failing this – it is up to individual jurisdictions create their own systems and apply moral and economic pressure on recalcitrants to do likewise.

    While we have a patchwork system, taxing raw CO2 producers like coal miners on their exports doesn’t make sense to me. It doesn’t stop the Chinese from using coal (perhaps very marginally) but it does impact both the local miners and Australia generally. Isn’t this a case of punishing the compliers? Wouldn’t Australia be better of taxing carbon on the consumption side domestically, including imports, and pushing for a comprehensive international system? CO2 doesn’t respect borders so an international system is a the best solution but it the mean time we should minimise the nasty economic incongruities.

  26. Jim Birch
    March 2nd, 2011 at 09:18 | #26

    @manchild
    Isn’t buying a stable climate system a form of consumption, anyway? You’re actually talking about the secondary effects and forgetting the main item, aren’t you?

  27. Dave
    March 2nd, 2011 at 10:46 | #27

    I love playing chess. My favorite move (besides checkmate of course) is to fork the opposition queen and rook or bishop with my knight. Knights are great for forks because a less experienced player finds it hard to see them coming, and they attack from squares that are difficult to counterattack.

    Climate policy is much like a game of chess at the moment, and the government, whether it knows it or not, has just got itself into a position where it can fork the opposition. When the chaos and namecalling over who can be trusted dies down, the argument will shift to the economic viability of the scheme, how much it will cost, who can benefit and who the losers will be. The Climate Institute just recently released a report suggesting that a carbon price could create over 30,000 jobs in regional Aus, although it does not say how many will be lost. Yesterday, the Regional Greenhouse Gas Initiative (RGGI), ten north-east US states that are implementing a cap and trade program to reduce emissions, released a report which highlighted its economic benefits. For instance, participating states are showing a $3-$4 benefit for every $1 investment. Their website is:
    http://www.rggi.org/
    Once Australians start seeing these economic benefits, and more importantly, start seeing other countries implementing these schemes, the arguments will be “why are we being left behind?” and arguments such as “our contribution won’t make a lick of difference to the temperature” will suddenly become superfluous to the debate.
    If the Liberal/Nats continue the course that they are on, they will have forked themselves where they will have to choose between arguing against an economic prosperity, or suffering a political humiliation in backing down. As far as I can see, Malcom Turnbull is the only one who can see this fork coming and is positioning himself to avoid it.

  28. Ben
    March 2nd, 2011 at 12:35 | #28

    JQ, I think you have a problem with your forum site again. I did not post #24 above! BTW, yesterday, the site thought I was Chris Warren until I hit ‘reload’.

  29. Chris Warren
    March 2nd, 2011 at 13:07 | #29

    Yea,

    That post was from me.

  30. Donald Oats
    March 2nd, 2011 at 13:19 | #30

    These days I am always disappointed, but never surprised, at the new lows sought by the Liberal/National opposition members. The most recent announcements by several who should know better, and by one – Sophie Mirrabella, unfortunately not a bright light unlike her name suggests – who clearly doesn’t know better, directly comparing senior government ministers with various brutal dictators, is plumbing the very depths of inflammatory rhetoric. Then Abbott comes out and gives his usual lukewarm shift of position after the other ministers have done the dirty work of bringing up Gaddafi, Mubarak, Howard, and others first (okay, so the “Howard” is me joking around). Expressions like “people’s revolt” and “rising up”, when coupled with the current affairs in the MSM (people’s revolt in Libya and its reporting/coverage, for example), are at the least obviously of more relevance to the nutters who want to get physical.

    And none of this carping on by the opposition actually debates the main issue which is not the scientific advice on climate change, but is the set of policies that should apply given that (scientific advice). I automatically dismiss the right-wing flaks – degrees or none – who pop up anywhere a consulting dollar or PR dollar is to be found. I’ll get my science from the scientific institutions and their principal staff, thanks.

    PS: If these jokers can talk like this in opposition on obstensibly non-violence-related issues like anthropogenic global warming, asylum seeker processing, recent proposed levies for local flood disaster victims, cost of asylum seeker burials, and a whole host of other issues, then Heaven help us if they get in government and talk like that then!! And what is to make us think that they won’t talk like that when in real power? Foreign Affairs parties would be a blast – possibly literally! Too dangerous to have them in power, I reckon. I hope their newer crop of Liberal wannabes are a bit more restrained than this mob, that’s for sure.

  31. may
    March 2nd, 2011 at 13:32 | #31

    am pleased the site does exist.

    when the page-unavailable came up i wondered if the address was not Potsdam but Potemkin. heh.

    commenting here i think/hope i have made it plain that economics is not my proffession.
    the debates are a gift,appreciated as a demystifying window looking into the closed-room of the self justifying ,self serving argument of those who see me as a mere (expendable)economic unit or member of the herd.

    any contribution made by me is in this area restricted to the pre-beginners.

    niggles like
    what gives with the term “consumer”?
    if i consume something i eat it or drink it.
    i don’t wear it or drive it or plant it.

    how come the illegal economy is not included in GNP?(even inevitably as surmise)

    projections of a low carbon economy are really thin on the ground.
    what happens if the genetically modified food corporations manage to wipe out the burgeoning organic industry?
    stateless corp makes squillions and you and i can no longer obtain out fav consumable.
    the process is well under way here in the west.
    the contracts the gulled farmers have to sign to grow the patented product have to be seen to be believed.
    etc.

  32. Ikonoclast
    March 2nd, 2011 at 14:22 | #32

    I’ve been blogging for quite some time that a carbon tax is the way to go. However, I’ll make a prediction. Abbott will run on an anti-carbon price platform at the next election and HE WILL WIN.

    A large advertising propaganda blitz from the corporate fossils and the Liberals (bank-rolled by the coporate fossils) will mislead and delude the Australian public and deliver a big win to Abbott. During Abbott’s tenure in office, the world economy (and Australia’s with it) will fall off a cliff. I will enjoy watching Abbott twist in the wind.

    Meanwhile, I will have to live on a much tighter budget (like most people in Australia) and I will enjoy the fact that living lean is good for my health and waistline. People will finally realise that my dire resource depletion predictions were all correct… and they will detest me more than ever for it. :)

  33. manchild
    March 2nd, 2011 at 17:24 | #33

    @Ben

    Imagine an economy where all workers were employed to produce machines that make more machines.

    @ Jim Burch

    Yes, I totally agree with you. My original point may have been a little unclear, but my main point was that any paper evaluating climate policy by looking at GDP is surely flawed. Looking at consumption is better, and looking at consumption plus environmental effects is even better again.

  34. pablo
    March 2nd, 2011 at 19:35 | #34

    I won’t detest you Ikonoclast, far from it. I’ll be pointing you out to fellow travellers on this our ‘road to Damascus’ as a blogger of consistency, a Nietschean, nee Hobbesian, light on the hill.
    Have I gone over the top? Too bad, but certainly no detestation from this quarter Ike.

  35. Ernestine Gross
    March 2nd, 2011 at 19:55 | #35

    manchild,

    The paper you are trying to discredit is titled “EU climate target: Less CO2-emissions could trigger more economic growth ” Its key fidings are:

    English | Deutsch 02/21/2011 – Increasing the EU’s 2020 greenhouse gas reduction target from 20% to 30% could help boosting European investments from 18% to 22% of GDP, leading to a GDP increase of up to €620bn ($840bn) and the creation of up to 6 millions additional jobs.

    Your posts are off topic because they do not contain any information relevant to the research question of the paper. Alternatively put, if you wish to have information on a question of interest to you, then you’ll have to research the literature rather than complaining that a specific paper which addresses one specific topic does not cover the topic of interest to you.

  36. Alice
    March 2nd, 2011 at 20:06 | #36

    Not happy about Coles and Woolies and the Milk Wars. My god – this unlovely price war between two ugly duelling duopolists has the potential to decimate our local milk producers (and then watch the prices soar).

    How much local production will be lost. Fonterra is going to pay farmers more while they are at war. They reneged on the deal.

    This really is ugly – to be fair I feel sorry for Coles and Woolies – they have nowhere left to go to increase their market share here except to try to strangle each other and our local farmers and us.

    Out of kindness its about time someone in ACCC decided they need to be separated (amputated) into the sum of their parts.

    Not that I expect Mr Samuels to acknowledge the extent of the problem – and even Fels whilst acknowledging the problem, didnt manage to solve it – thats a great commendation of the absolute toothlessness of the ACCC, when they cant do what they want about a real lack of competition problem.

    It helps to think of the pain Woolies and Coles are going through – they cant move without swapping pieces on a game of chess in check. Reminds me so much of Mayne Nickless and TNT back in the late 1980s.

    Nowhere to run, nowhere to hide. Collusion comes next.

  37. Alice
    March 2nd, 2011 at 20:08 | #37

    sorry Fonterra isnt going to pay
    What ever happened to co-operatives (like Dairy Farmers co-operative). Time to bring it back?

  38. Peter T
    March 2nd, 2011 at 20:21 | #38

    I am coming to the view that forecasts of this or that impact on GDP, or consumption or the like are irrelevant. We seem to be headed (given the long lead times in the climate system) for well over 2 deg C within the century. If mitigation is out, then adaptation is the only option and, given that we can’t model with any accuracy the combined climate/social changes at regional scale, and have little idea of how bio-systems will react at that scale, then local knowledge and adaptability will be at a premium. The converse is that large scale human systems (which dominate our current social landscape) will be at a severe disadvantage. The GDP of Australia will be a fiction; the gdp of, say, the upper Murray might be a useful number.

  39. Chris Warren
    March 2nd, 2011 at 21:55 | #39

    @manchild

    If machine “A” produces another machine “B”, then B is a consumption good.

    Any earlier producer of machines A, also produce consumption goods, namely “A-type” machines.

    Maybe you are thinking of “final” consumption goods, but even here, your claim is null and void.

    After all, the production of more intermediate or investment goods, and associated employment and income, is not rational unless it assumes that more “final consumption” goods are produced as a result.

  40. Charlie
    March 2nd, 2011 at 22:05 | #40

    Peter T: can you explain to me why a rise of over 2 oC over the next 100 years would be upsetting to anybody living any place at or above the latitude of Paris, all of which have ghastly winters, and ordinary “summers”, with far more deaths from cold EVERY year than from the 1 in 100 years heatwave? Or are you a member of the Royal Society of Edinburgh, along with immensely stupid people like Gabi Hegerl (AR4 WG1 Ch.9), who also thinks Edinburgh is always balmy so long as it never achieves higher annual mean temps by 2 oC?

    As for me, nothing would induce me to live in Paris or any place northwards unless its annual mean temperature rose from the current 10 oC (+ or -1) to at least 20 oC, and even then I would think twice, as I have aversions to both haggis and frogs’ legs. Give me Cairo or Dubai anyday (the latter already has 100,000 refugees from Glasgow and Edinburgh).

    Get real!

  41. Donald Oats
    March 3rd, 2011 at 07:28 | #41

    @Alice

    Interesting you should bring this up. Someone I know reckons in his time the coops sold out and made their money (eg Jervois, Mypo coops were local) and this was to companies like National Dairies and other large private companies. These private companies were then taken over by the even bigger public companies, and in a sense, here we are. The original coop shareholders made some decent money selling their shares across, and it is presumably the sons, daughters, or even grandsons and granddaughters, who are copping the financial impact of the selling out. Meanwhile, there are probably some rather wealthly grey nomads out there :-)

  42. jakerman
    March 3rd, 2011 at 07:44 | #42

    Peter T: can you explain to me why a rise of over 2 oC over the next 100 years would be upsetting to anybody living any place at or above the latitude of Paris

    A hundred million migrants fleeing north from drought, flood, famine and civil conflict.

  43. Alice
    March 3rd, 2011 at 08:03 | #43

    @Donald Oats
    Well apparently the executive management of Coles are British who are likely to get great big huge bonuses and fly off somewhere else after they decimate local production here. Apparently they killed off UK milk production which now gets its milk from the Netherlands.
    Great – augurs well for us doesnt it? Less local food production, less jobs, and the execs still get their fat bonuses on the banks of bankrupted Australian dairy farmers and higher unemployment here.
    If this isnt a problem with our competition laws I dont know what is. The dairy farmers may all be better off signing up and putting whatever spare cash they have (and floating the interest to others) into a co-operative and doing it themselves before they are bankrupted by Coles and Woolies.

  44. Jim Birch
    March 3rd, 2011 at 08:20 | #44

    @Charlie
    It’s not all about you.

  45. Shane
    March 3rd, 2011 at 12:25 | #45

    @John Street
    Gezz Charlie that’s a simplistic view to say the least.
    You would care because 2 deg C warming is only the average global temperature rise, for all we know Edinburghs temp might not rise at all but say for example Brisbane the average might be 10 deg hotter, some place with a change in wind and ocean currents may even be colder? It’s a complex system and is hard to predict.
    The problem for humans is that we’ve built our cities where the conditions suit us but those conditions will change. If your right though and Edinburgh does become a tropical resort then I’m sure you won’t be the only one moving there, you’ll have about 6 billion others to keep you company.

  46. Ernestine Gross
    March 3rd, 2011 at 16:10 | #46

    @Peter T

    I am sympathetic with your “… view that forecasts of this or that impact on GDP, or consumption or the like are irrelevant” because this is what is most talked about in the public even though macro-economic models, to which GDP belongs, don’t contain any relevant conceptual framework for addressing the problem of negative externalities such as ghg emissions.

    If its any consolation, the studies concerned with the impact of ghg mission control policies on GDP, are still important for many members of society, particularly governments (fiscal policy) and those who generate (or ‘manage’) aggregate net debt globally.

    IMHO, as long as Malcolm Turnbull is prepared to take questions on Q&A on the topic of climate change, I am confident that the original problem is not lost from the public mind, at least locally. It would also be good to hear more from the current Minister for this portfolio and a few other members of parliament who seem to understand the crux of the matter very well.

  47. Ernestine Gross
    March 3rd, 2011 at 16:19 | #47

    @Ikonoclast

    Like you, I have been concerned about resource depletion for a long time – since I was in primary school. Unlike you I don’t blog much about it. But rest assured I do read your posts.

    We have to cheer up sometimes. Lets try an alternative thought experiment as to your “Win” and on what grounds prediction. Say we try something as simple as intellectual honesty. In this case, both leaders of the major parties should voluntarily refrain from making any public announcements on the subject (on the ground of symmetry of position)and let the relevant Minister and Shadow Minister do the talking.

  48. Latebowl
    March 3rd, 2011 at 16:58 | #48

    Hi guys,
    I’m only an economics student so please be constructive and/or gentle.
    Why can’t the carbon tax start off with targeting the two areas of electricity and petrol?
    I’d think that by taxing electricity producers then returning the revenue to the electricity retailers under the proviso that there would be no price rises past onto the end users would result in cutting producers emissions with no major economic costs?

    With petrol the government could tax petrol only leaving transport and industry untouched then return that revenue from motorists in the form of cuts in vehicle registration costs or rebates on vehicle insurance premiums? Any revenue left over could be used to lower public transport costs or tax rebates?
    If it was structured so that the average sized car is tax neutral then smaller car owners would benefit from the carbon tax and considering that small cars are more often driven by low income earners we may see a slight boost in consumption spending since low income earners have a higher propensity to consume?
    I’m sure there’s plenty wrong with my argument it seems a bit too simple?

  49. Owl
    March 3rd, 2011 at 19:38 | #49

    Settle, Charlie.

  50. jakerman
    March 3rd, 2011 at 20:38 | #50

    Latebowl,

    The electricity model would leave out any non-centralised systems such as home roof PV, and might also run into problems where generators are retailers (creating a loophole incentive to be both).

    I think your petrol model has lots of merit. But why tax petrol only? Diesel already gets large subsidies with perverse pricing effects for mining and freight.

  51. Charlie
    March 3rd, 2011 at 21:12 | #51

    Hi fans! You all forget that the IPCC Book of Faith states that temperature increases will be highest in the high latitudes, and least in the tropics. For the High Lats there is no evidence whatsoever for rising mean temps, and for the tropics, the temps remain as flat as they always have been. Gorgeous Gabi Hegerl will have to do more to entice me to live with her in Edinburgh, despite her own stunning allure, by showing firm evidence for recent rapid rise of annual mean temp there from its usual less than 10 oC to at least 20 oC by 2015 at latest given my age. A lousy 2 oC will not do.

  52. Latebowl
    March 3rd, 2011 at 23:09 | #52

    My thoughts on diesel is that freight doesn’t have too many alternatives, raising the cost of diesel might see more demand for air freight which is even more poluting that road.

    What I put forward before though would just be a very simple start to the process which could be explained clearly to the public and expanded when the ETS comes in, my fear is that if the regime starts off as a complicated model it will be too easy politically to mount a scare campaign.

  53. Chris Warren
    March 4th, 2011 at 09:18 | #53

    @Charlie

    This is Ptolemaic, nicotine, Irvinite, nonsense.

    We have been all through the issues, and I have read every bit of ‘evidence’ you have presented.

    Denialists refuse to agree with science or historical facts because of ulterior motives. In the case of global warming, this is economic greed.

    Denialists do not understand data, regularly confusing graphs of anomaly, with graphs of temperature and they do not understand history, in that Medieval Warming and Little Ice Age are presented out of context.

    Denialists also get fixated with small facts that that complement their view. There has been a slight temperature rising tendency before the industrial age. However it is not possible to associate all this with ‘natural forces’ as, for example, the earth moves between two great ice ages (and Greenland is green etc). Increased CO2/methane commenced with deforestation, agriculture and population increase.

    Denialists cannot explain why the Medieval period was so warm, and why the Little Ice Age was so little. Increased GHG theory can.

    On the one hand we have greedy denialists, one or two artificially-funded rags, and environmental visigoths; on the other we have CSIRO, Academy of Science, United Nations, Bureau of Meteorology, and all quality refereed scientific journals.

    No contest.

  54. jakerman
    March 4th, 2011 at 18:23 | #54

    My thoughts on diesel is that freight doesn’t have too many alternatives

    Less of if (localization) and move to more efficient and safer rail.

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