Hand it back

October 29th, 2013

The Sydney Morning Herald interviewed 35 economists and found 30 of them favored carbon price (tax, ETS or some mixture) over Direct Action. It quotes Chris Caton as saying “Any economist who didn’t opt for emissions trading “should hand his degree back”, says Chris Caton.

I’d take that a step further.

Anyone with a natural science degree in any field will find plenty of examples of denialist lies on everything from basic physics to bushfires. More generally, denialists have attacked the entire scientific enterprise with absurd conspiracy theories. No-one who endorses these attacks, explicitly or tacitly, deserves to call themselves a scientist.

Similarly, anyone with a degree that includes even minimal exposure to statistics should understand that denialists were misusing the concept of statistical significance when they claimed, a few years back there had been no significant warming since 1995. Subsequent hacks have had to move the goalposts forward to 1997. And that’s just one example of the cherrypicking dishonesty rife on the denialist side of the debate. So, anyone who claims to be a sceptic and hasn’t distanced themselves from claims like these should send back their math/stat degree.

Then there are those with university degrees, but without the training in science, maths or economics to assess the key issues independently. Anyone with a university education ought to be able to recognise the limits of their own expertise, and to be able to distinguish between bogus sources of information and the products of genuine peer-reviewed research. If they prefer the kind of nonsense circulated on denialist websites to the conclusions of scientific research, they should hand in their degrees and instead obtain one of the many qualifications available, for a modest fee and no work, on internet sites like those listed here.

Categories: Boneheaded stupidity, Environment Tags:
  1. October 29th, 2013 at 12:36 | #1

    Hi John,

    I’m not sure that when “Dr Chris Caton said any economist who did not opt for emissions trading ‘should hand his degree back’” this says much about the climate science itself (where I’m with you) than on the cloying orthodoxy of much of the economics profession.

    Given the choice between a market-non-solution and a non-market solution, the economics profession would still by and large choose the market one for ideological reasons, regardless of probability of climate effectiveness in either case. Which should give the rest of us pause about accepting their unanimity on this point.

    Abbott’s ‘alternative’ is a joke, but the answer for the rest of us lies not in simply inverting that, but rather in recognising the establishment debate for what it is: a sideshow and a distraction from their total unwillingness to countenance genuine direct action on the issue.

    Cheers,
    Marc.

  2. Newtownian
    October 29th, 2013 at 12:54 | #2

    Before targeting denialist ‘scientists’ there are two other groups I’d like to see scrutinised more in public:

    1. Those curious economists who claim their perspective/social science is as hard as physics (which it isn’t) but then go on to deny climate change and limits to growth are based on hard realities – or perhaps more importantly – the full ramifications of CC and LtG concepts i.e. that growth involving increased material wealth is finished already, after fully costing/ allowing for extraction costs, energy needs and long term sustainability of current practices.

    This latter is something even most progressive economists still don’t yet get.

    2. ABC current affairs who continually promote a bogus ‘balance’ between climate scientists and climate deniers. I’m specifically thinking of the leading questions and stacked panels characteristic of Q&A which promotes itself as ‘public debate’ as though public schoolboy sophistry is the way to deal with these vital issues. And of course the business reports which still don’t see no link in their operation between environment society and capitalism or the flaws in growth based capitalism.

    [ While we cant expect anything better from the commercial stations their tabloid style is more about selling air time through sensationalism - and they do need to eat. But the ABC make high claims and should offer better in the way of analysis and be held to account.]

  3. October 29th, 2013 at 13:00 | #3

    I’m no economist, but it seems obvious to me that a price on carbon is the most effective solution.

    The only direct action that I could countenance is an immediate ban on new coal fired power stations, followed in a few years by a ban on new gas fired power stations. Together with phase out strategies for both.

    But I don’t think this is Tony’s idea of direct action…

  4. Alan
    October 29th, 2013 at 13:16 | #4

    One of the 2 economists who endorsed the Abbot plan has an article advocating inaction at Troppo. A number of commenters have cried out for one JQ to come and administer an appropriate smiting to the article. It may be time for you to leap on your white horse…

  5. Ernestine Gross
    October 29th, 2013 at 13:38 | #5

    Given the publicly available information on the Direct Action plan, it involves a tax of about $3billion for carbon emission reduction and other environmental improvement objectives. It is not clear how much of the $3billion will be allocated to carbon emission reductions. But on the face of it, it is clearly a form of tax (planned expenditure which has to be paid for). Its disadvantage over a carbon tax on emissions or cap and trade (ETS) is that the general tax payer rather than the relevant decision makers have to pay the tax. Direct Action is not obviously incentive compatible.

    Some confusions about the ETS seems to linger on.

    Cap and trade (ETS) is not a ‘market solution’. The important non-market decision is the determination of the cap and this parameter value should be determined by scientists knowledgeable in the field.

    Trading emission permits introduces a degree or flexibility in the electricity and other forms of energy production sector, relative to an explicit carbon tax on emissions, which may be more important in some local (country) economies than in others.

  6. Ikonoclast
    October 29th, 2013 at 13:55 | #6

    What should have been very easy (an appropriate pigovian tax on fossil fuels) has been made out to be very hard. This alerts us to the fact that the Tory establishment and the gutless, traitorous modern Labor parties (Oz, UK) and Dems (USA) never had the slightest intention to do anything about GHG emissions.

    The first conference was in Rio in 1992. The first Kyoto Protocol was 1997. Now it’s 2013. The world has done nothing. Sweet F.A. as the saying goes. Global emissions have gone up and up with maybe a little dip in the GFC.

    It’s interesting how this modern system, late stage capitalism, has an uncontrollable (by humans) momentum. However, natural limits will stop it in its tracks.

  7. John Quiggin
    October 29th, 2013 at 14:16 | #7

    @Marc Newman

    It’s true that the instant reaction of most economists would be to favor a market-based mechanism and that some would favor it regardless of the evidence. On the other hand, economists who don’t share these prejudices (me, for example) have looked hard at the issue and concluded that a market-based approach, backed up by appropriate regulations and interventions is superior to a policy based mainly on “Direct Action”. So, I think it’s fair to say that an Australian economist who claims to favor Direct Action is almost certainly in favor of doing nothing, and is backing Abbott on that basis.

  8. October 29th, 2013 at 14:38 | #8

    @John Brookes

    I couldn’t agree with you more, John Brookes. And I couldn’t disagree with John Quiggin any more than I already do. I absolutely accept the facts of climate change, but I haven’t seen the slightest evidence that Emissions Trading is the right solution.

    I’m loathe to self-link, but I did blog on this exact issue a few months ago:

    And as I have faux pas’d already, I will even self-quote:
    Emissions trading is a scam proposed by unscrupulous American corporate monoliths who saw a way of making more money out of a problem that they themselves were creating

  9. October 29th, 2013 at 15:04 | #9

    Hi John,

    I’m not disputing that those economists backing Abbott are doing so in significant part on a tacit (or not so tacit) “do nothing” basis. What I am arguing is that the various mechanisms proposed for pricing carbon so as to induce a change in boardroom and consumer behaviour get caught between the Scylla of ineffectiveness – low pricing so as to make them more ‘achievable’ or ‘palatable’ – and the Charybdis of social regressiveness and economic dislocation – high enough pricing to achieve change in the requisite timeframe, but in consequence driving down living standards and probably creating recessionary market shocks.

    Given the scale of the technical and engineering challenges of transitioning energy generation, industrial retooling, addressing a bunch of problematic low turnover capital elements like housing stock, etc, I think it is a fantasy that any politically possible tax or trade scheme could achieve those outcomes before we all cook. And as we are seeing in Europe today, the cronyism that inherently goes along with turning these schemes over to the Wall Street types who delivered the sub-prime debacle, generates political backlash even from people predisposed initially to support them. Not to mention that (ahem) these schemes, without systematic price controls to prevent the passing on of costs to consumers, are inherently regressive to the extent that they are effective, often more so.

    As a consequence, I think we need to see this as a special case of a more general problem: the retreat by the left from conceiving and aggressively advocating direct political solutions to various problems, and instead backing all manner of market faux-solutions that fit in with the increasingly unpopular diktats from the montpelerinist/chicagoist types, has left us intellectually disarmed in the face of capital.

    Meanwhile, the rest of the population increasingly disengages from them and their political tools. I’m not sure many people outside the economists club is going to be politically convinced in any durable or passionate way that the solution to “the greatest market failure the world has seen” is … more marketeering.

    Curious as to your thoughts on this.

    Cheers,
    Marc.

  10. October 29th, 2013 at 15:11 | #11

    @Tim

    sorry I seem to be stuffing up links. I don’t usually comment on blogs, but this post by Quiggin got my blood up

  11. Hermit
    October 29th, 2013 at 15:15 | #12

    A condition on carbon pricing I think is that it should be done properly (or be ‘stringent’ in academic-speak) or not at all. Think of the Mexican Wave done by an Australian soccer crowd as opposed to say actual Mexicans. One lot clearly does it better.

    If I recall the original Treasury modelling on carbon tax had some rubbery assumptions. When they said ‘least cost adjustment’ I think they meant buying clean development type offsets via the EU market. I believe those offsets are now largely regarded as a scam. Treasury also assumed that carbon belt tightening would be recurring not one-off. The ~7% reduction in power sector emissions could have been initial bill shock plus several other factors unlikely to be repeated. Consumers may now have settled into the new price regime. However in an ETS the total allowable emissions should decrease in steps so the pressure is not only ongoing but combines transport emissions with power sector. I think that is better than carbon tax if done right.

  12. John Quiggin
    October 29th, 2013 at 15:46 | #13

    caught between the Scylla of ineffectiveness – low pricing so as to make them more ‘achievable’ or ‘palatable’ – and the Charybdis of social regressiveness and economic dislocation – high enough pricing to achieve change in the requisite timeframe, but in consequence driving down living standards and probably creating recessionary market shocks.

    We’ve had a year of experience of a price above $20/tonne. Despite Abbott’s desperate search, evidence of recessionary market shocks was pretty much non-existent. The revenue from the package was distributed in a way that ensured a net socially progressive outcome, and living standards have generally continued to increase.

    Ideally, we ought to have started 10-15 years ago, and raised the price to something like $50 tonne now. There wouldn’t have been any significant economic difficulties. The problems are entirely political which isn’t to minimise them. Resistance by affected industries was inevitable. The fact that the issue became a leading battleground in the culture wars wasn’t and neither was the timing of the global financial crisis, though of course something of the kind was bound to happen sooner or later.

  13. ZM
    October 29th, 2013 at 15:52 | #14

    JQ@7 ” On the other hand, economists who don’t share these prejudices (me, for example) have looked hard at the issue and concluded that a market-based approach, backed up by appropriate regulations and interventions is superior to a policy based mainly on “Direct Action”"

    Mr Quiggin, respectfully, and Keeping in mind your post on naming the interactions between a person (a) who says government intervention to the point of a war economy is needed to deal with climate change and a person (b) who says a raft of interventions including but not restricted to mandating new more energy efficient cars and the banning of the beef (and/or dairy industry?) would be half way sufficient for dealing with climate change – Whereupon person a says people in general are not going to agree to accede to all of person b’s stated and unstated measures at all (and presumably this is why we need a war economy) – might you be willing to show us your workings in terms of coming to the conclusion re: a market-based approach (with unstated interventions) being superior – particularly in terms of whether this is because you think it would be of more efficacy in and of itself (there’s a term but I can’t remember what it is, sorry) – or because politically it would be unlikely for Anglophone especially but also other governments to commit to a non-market approach, and therefore arguing for a non-market approach is of no efficacy whatsoever?

    Sorry if that’s an unclear question. I can try to rephrase it if it’s confusing….

  14. John Quiggin
    October 29th, 2013 at 15:57 | #15

    Extracting what I think is the crucial point “whether this is because you think it would be of more efficacy in and of itself”

    That’s what I think. I (and as far as I know, all economists who’ve looked at the issue) disagree with claims about the need for intervention on the scale of a war economy or similar. Here’s an estimate from 2006, which is still pretty much on the mark as far as I’m concerned

    http://johnquiggin.com/2006/11/15/stern-on-the-cost-of-climate-stabilisation/

  15. ZM
    October 29th, 2013 at 15:58 | #16

    I’m about to read that now. But didn’t you disagree with his discount rate or something like that?

  16. Evan
    October 29th, 2013 at 16:04 | #17

    It’s hard not to notice that one of the 2 “economists” who supported the Coalitions policy works in your department, John.

  17. rog
    October 29th, 2013 at 16:06 | #18

    On the face of it a market based trading system seems to be the most logical approach. However the devil is as always in the details and dealing with competing forces can be self defeating.

    Direct action is not entirely without it’s attractions, the solar subsidy in NSW and elsewhere has resulted in a significant uptake and solar power is having a disruptive influence on the energy sector.

    The EU has yet to deliver significant reductions in emissions that can be attributed to an emissions trading system, other factors appear to be involved in arriving at emission levels.

    I would favour a govt imposed regulation on emissions rather than just leaving it to the market but finding a political party strong enough to deliver could be an issue.

  18. John Quiggin
    October 29th, 2013 at 16:07 | #19

    @Evan
    We’ve had words on the topic

  19. John Quiggin
    October 29th, 2013 at 16:20 | #20

    @ZM
    There was a disagreement. I was on Stern’s side. But even critics of Stern like Nordhaus and Weitzman agree on the desirability of strong action and market-based policies.

  20. ZM
    October 29th, 2013 at 16:22 | #21

    “John Quiggin 04.24.12 at 8:49 am
    If you accept the standard parameters and a growth rate of 3 per cent, you get a real discount rate of 6 per cent. That means a dollar now is worth around $150 in 2100.

    And, regardless of your growth rate projection, a life saved now is worth eight premature deaths in 2100.”

    Do Stern and you accept standard parameters or disagree with them? I can’t read the economics papers very well, I don’t have that sort of education background.

  21. John Quiggin
    October 29th, 2013 at 16:28 | #22

    @Tim The question wasn’t about ETS but about a carbon price. If you’re worried about financial sector rorts, you should like carbon taxes.

  22. John Quiggin
    October 29th, 2013 at 16:29 | #23

    @ZM
    We disagree with an assumption (inherent discounting) which gives these results when combined with the standard parameters.

  23. T Westland
    October 29th, 2013 at 16:33 | #24

    @Marc Newman

    Not to mention that (ahem) these schemes, without systematic price controls to prevent the passing on of costs to consumers, are inherently regressive to the extent that they are effective, often more so.

    This seems pretty misguided to me, and a bit too close to one of the climate delusionists’ talking points, i.e., that a price on C02 emissions has to substantially affect incomes in order for it to work. As with any government intervention in the market, a carbon price works through two channels: the income effect (reducing people’s income that they can use to ‘buy’ emissions-intensive goods and services) and the substitution effect (making emissions-intensive goods and services relatively more expensive compared to low-emissions goods and services). Transfers that neutralise the income effect don’t have any effect on the substitution effect.

  24. John Quiggin
  25. ZM
    October 29th, 2013 at 17:02 | #26

    “It should stand firm globally, election after election in each of the countries” from the pragmatic climate policy…
    Thinking of the Labor MP who quoted Harper Lee.
    I don’t know enough of the facts to judge the article itself, but in terms of this specific part and taking it seriously, isn’t that really a constitutional issue?
    I’m not sure about other jurisdictions, but in terms of Westminster countries with Queen Elizabeth II as head of state, I think all of them have as well as their own constitutions the unwritten English/Great Brittish constitution.
    Christopher Pyne and Tony Abbot profess their admiration for the Magna Carta (I’ve a strong suspicion they’d root for the barons) – but even here it’s (legally? I’ve no law knowledge) arguable that the Crown has and the bearer accepts in corronation a duty to future generations “Know that before God, for the health of our soul and those of our ancestors and heirs, to the honour of God, the exaltation of the holy Church, and the better ordering of our kingdom, at the advice of our reverend fathers ”
    Would their be much constitutional material which would support a case for the Crown’s responsibility to care for it’s vast lands (waste lands/crown land) for the countrie’s heirs?

  26. Richard denniss
    October 29th, 2013 at 17:15 | #27

    I’ll leave judgement if my esteem to others but I was one of the economists surveyed for the piece in questions and, given the question that i was asked i definately came down on the carbon price side…but, while possibly setting myself up for a kicking, I feel I need to clarify a few things
    1) I much prefer a carbon tax to ETS as I think that taxes interact with what we used to call ‘complementary measures’ and now call ‘direct actions’ much more effectively
    2) While I stand by the work that The Australia Institute has published on the likely flaws with the Direct Action policy, as proposed, I can’t get as excited about bagging it in theory as many others.
    Put simply, the Contacts for Clisure that the environment movement once loved was ‘direct action’ as defined by Greg hunt. Policies such as the CEFC, RET and household insulation can, in some sense, be described as ‘direct action’ though not in the terms favoured by the coalition to date.
    Of course we need a carbon price, but the logic for its removal is political not economic. The question for those (and I definitely include me) interested in tackling cliamte change is whether we spend 3 years mourning the loss of the carbon price or simultaneously work to improve the direct action policy (eg paying to end a lot of marginal logging would deliver big emission reductions and a bunch of spillover benefits) while building political acceptance of the need to go far beyond 5 per cent.
    Again, I’m clearly pro carbon price, and preferably a carbon tax, but I don’t think the ‘either/or’ debate between pricing and ‘direct action’ is intellectually or politically very helpful…just saying :)

  27. Hermit
    October 29th, 2013 at 17:16 | #28

    In contrast to explicit carbon pricing Obama has proposed a new benchmark of 1,000 lbs (hey they could have used bushels) of CO2 per Mwh of electricity generated.
    http://www.reuters.com/article/2013/09/20/us-usa-energy-emissions-idUSBRE98J03A20130920
    That lets in renewables, nukes and combined cycle gas but not coal or open cycle gas though there are transitional clauses and the CCS-ready ploy. If passed by Congress it should mean no new coal plants in the US. Meanwhile regions within the US like California have their own ETS supposedly without the EU mistakes. The Corporate Averaged Fuel Economy (CAFE) benchmark will be about 50 mpg for a new compact car.

    Couple of problems. The fracking boom which brought cheap natural gas appears to have peaked so coal is now cheapest for power generation. Americans also seem reluctant to drive small low powered fuel cars or pricey electric cars. The success or otherwise of these forms of ‘direct action’ in both the stationary and transport sectors needs to be judged a year or two from now. I suspect both could go the way of Obamacare.

  28. John Quiggin
    October 29th, 2013 at 17:41 | #29

    @Richard denniss

    I agree with most of this. There are plenty of things that can be packaged as Direct Action, and that would be a kind of price based policy. I made this point about the RET a while back.

  29. October 29th, 2013 at 17:42 | #30

    @John Quiggin
    Point taken, but I think that carbon price vs emissions trading: much of a muchness.

    My point is that if we had faith in the market to deliver the solution, the easiest political pathway is to simply ban the burning of coal at a particular date in the future. The market then solves the problem of how to replace coal.

  30. Ernestine Gross
    October 29th, 2013 at 18:53 | #31

    I would like to hope important pollution problems, such as ghg emissions, other air pollution and noise pollution, are not politicised along some ‘left’ vs ‘right’ line. Except for extreme cases, the ‘left’ and the ‘right’ are political categories apparently suitable for expert discussions while important pollution (negative externality) problems are of interest to everybody, including those who have no clear notion of the political ‘left’ and ‘right’.

    In yesterday’s Q&A program the policy of ‘the user pays’ was flagged. A corollary to this position is ‘the polluter pays’ – in contemporary ‘orthodox’ economics (as distinct from 19th century naive market economics).

  31. Jim Rose
    October 29th, 2013 at 19:07 | #32

    Let climate science be settled. How much will global warming cost is the correct question for policy debate.

    The chances of India, China and the rest of the Third world agreeing for forego or even slow economic development to fight global warming is zero even before you consider the international collective action, verification and free rider problems.

    Adaptation and richer is safer are the only games in town. Climate change will be mostlly a threat to the poor in poor countries.

    Tom Schelling posed this question:

    “Suppose the kind of climate change expected between now and, say, 2080 had already taken place, since 1900.

    Ask a seventy-five-year-old farm couple living on the same farm where they were born: would the change in the climate be among the most dramatic changes in either their farming or their lifestyle?

    The answer most likely would be no. Changes from horses to tractors and from kerosene to electricity would be much more important.”

  32. Ernestine Gross
    October 29th, 2013 at 19:53 | #33

    @Jim Rose

    If you have a degree in economics, hand it back.

  33. ZM
    October 29th, 2013 at 20:07 | #34

    @32 Jim Rose
    “Adaptation and richer is safer are the only games in town. Climate change will be mostly a threat to the poor in poor countries”

    Quite seriously – do you have a sense of morality/ ethics at all? From this I’m thinking no, but…

    Generally people don’t entirely think of living as a game (I hope?).

    What measures of adaptation do you propose? Obviously you would need a cascading plan of measures to implement as the effects of anthropogenic climate change become more severe over time.

    Richer may be safer – but exactly how do you propose to stay rich? Will everyone in the world be rich miraculously? do you have a plan to keep your wealth and to protect you and your wealth from the potentially rebellious poor here and abroad?

    You admit that climate change is a threat – I presume if you’re writing about it here you also admit it is human induced, and I guess you would recognise that not all humans act to induce it at the same rate – the rich (supposing they don’t just keep their gold quietly under their bed) act to induce it substantially more than the global poor – whom you think are most likely to suffer the consequences. Your statement then reads as if you are arguing that it is right or good (if you have any sort of concept of good and bad at all? if it’s all a game perhaps not…) for the rich to knowingly act in ways that will directly threaten the poor physically (climate change is obviously a bodily threat not a rhetorical one).

    Re: family farmers – perhaps you haven’t noticed the global enclosures of peasant land, the struggles of small scale farmers to stay on the land, and the huge increases in industrial and corporate agriculture over your lifetime? The farmer who lives on the same farm where they were born is not especially the norm – and regardless probably had siblings who had to live and work elsewhere.

    And how in this counterfactual scenario was climate change induced given electricity and tractors and what not are supposed to retain their historical fact-fullness? Apparently this guy missed the time traveller stepping on a bug or whatever memo.

  34. Hal9000
    October 29th, 2013 at 20:24 | #35

    @Jim Rose
    I hear what you say about climate change having the biggest impacts on the global poor. The point needs to be made, though, that where climate science is at its least settled, however, is what the negative impacts will be and where they will fall. Regional and indeed continental scale impact predictions are made with little confidence once the global temperature rise exceeds even 1.5 degrees. It is by no means certain that the northern hemisphere will benefit, for example, by permafrost melting even though it seems to offer the prospect of new and rich agricultural lands. The ecological response is unknown, since such rapid warming has not been experienced for a geological age. Just for a start, the behaviour of the insect population in such circumstances is unknown and may be devastating.

    So, I’m not convinced that complacency by the wealthy is a rational response to the issue. There has to be a lot of wishful and magical thinking, too.

  35. Hal9000
    October 29th, 2013 at 20:26 | #36

    Oops, that second sentence has too many parenthetical conjunctions.

  36. Ikonoclast
    October 29th, 2013 at 20:36 | #37

    @Jim Rose

    You seem to expect climate change will be gentle and incremental. If you have 20 or more years to live you are in for nasty shock.

  37. Marc Newman
    October 29th, 2013 at 20:56 | #38

    @John Quiggin
    Its a question of time, something economics is often not very good at. We *didn’t* start 10-15 years ago, did we? That means in order to hold the temperature rise to somewhere near the ‘tolerable’ 2degree point, we have only a limited window within which to act. When you factor that to the sorts of timetables you need, the market mechanisms need a correspondingly greater impulse to change. I’ve seen modelling which suggests the figure would need to be in excess of $80, *now* to be getting even close (I’d like to post a ref, but can’t find it to hand). The point I’d make is that the higher the price, the higher the (at minimum) short to medium term dislocation of prices. At current prices, the impulse to decarbonise is mild to say the least. But at the higher and *necessary* prices, we are looking at, to say the least a serious, what’s the euphemism, ‘adjustment’? More plainly, we’re looking at serious price shifts in a whole range of commodities, with all sorts of blowbacks up and down supply chains. If that’s not a recessionary driver, I don’t know what is.

    We can’t talk about this stuff in such an abstract way – its not enough to show that *some* change is possible using pricing (something only a fool would dispute) but you must also show that *enough* change is possible using pricing for the argument to be credible. You’d also need to show how your ‘non-recessionary’ claim held up at the higher price.

    Either way, we still face the fact that the higher the price, and we would both agree surely that for carbon price to work it needs to rise significantly above the $20 status quo, it is unlikely, particularly under a tory government, that many of the compensatory measures will survive or be supplemented. This means each time it does, there will be consequences for households which will undermine further support for it.

    I can’t see how it can possible both work and survive. Its one or the other it seems to me.

  38. John Quiggin
    October 29th, 2013 at 21:04 | #39

    @Marc Newman

    I’m confident that a world price of $50 tonne by 2020, rising steadily but gradually after that would get us close to 450 ppm stabilization. And it’s easy to show that the economic impact on Australia would be negligible, relative to long-run growth.

    Still, there are plenty of grounds for pessimism as to whether, under current political circumstances, we can get on to the price path we need. But all these arguments apply, with even greater force, to solutions based on drastic intervention, like Tim’s suggestion of a ban on coal burning at a particular date, or talk of a war economy.

  39. ZM
    October 29th, 2013 at 21:15 | #40

    JQ@39 given the very real differing incomes around the world, how could a $50 tonne price by 2020 (in merely 6 years time) work out without causing enormous further material marginalization to already marginalised persons?

    The income and wealth in Australia is vastly out of proportion with global averages – are you stating by saying that “it’s easy to show” that you also agree that Australia ought to maintain its current economic position relative to other poorer countries?

  40. ZM
    October 29th, 2013 at 21:17 | #41

    Following from the second point, this stance by wealthy countries has been a huge stumbling block in climate change negotiations – so how if you hold this view can you even imagine getting to a global price of $50 a tonne in the next 6 years?

  41. Marc Newman
    October 29th, 2013 at 21:37 | #42

    @John Quiggin
    So you’re that confident that it was the existing scheme that led to the renewables growth, not, as most of the industry would have it, the subsidy regime that was in place? And a *world price* of *$50* seems a pretty distant prospect, certainly by 2020. I have my doubts that that would be enough, even so.

    There is a lead time on a lot of the investments that need to be made – I have a lot less confidence than you that markets will lead that investment on time. In 7 years time, we’ll have wasted a lot of the required lead time. There is a point to talking about things like building stock – even on the most optimistic estimates, we would need *not* to be compounding the problem with more energy inefficient construction, yet buildings are still going up daily that barely meet the existing modest standards. There’s still no chance of completely replacing or even completely retrofitting the entire building stock in less than a couple of decades. Its the complacency of the price solution that gets me – as long as large scale investment tips, by, oh, I don’t know, some time around 2050, its fine. It just doesn’t fit with the science and engineering timetables.

    Meanwhile this whole situation represents an opportunity for social and economic renewal. By allowing the discussion to be hijacked by a debate about ‘science’, we’ve completely missed the fact that the solutions are left wing ones. We are talking about building industries from scratch, about building better homes and workplaces, about using the skills and intelligence of our engineers, our tradespeople, our workers, our technicians to radically retool industrial and commercial processes. About doing things that directly create lots of new jobs. We’ve missed the opportunity to talk about strategically using this work to rebuild and revitalise the regions, places like Wollongong and Newcastle that have suffered from rising capital intensity and global rationalisation. And in an era where even Russell Brand is talking about the need for a revolution of the 99% against the 1%, I think we can be pretty sure you’d find an audience for a progressive approach to funding it too.

  42. The Age
    October 29th, 2013 at 22:23 | #43

    I saw this the other day. Professor Warwick McKibbin is running a pretty flimsy line but I don’t know what Professor Paul Frijters is thinking. Surely, he must know better.

  43. Fran Barlow
    October 29th, 2013 at 22:49 | #44

    @ZM

    JQ@39 given the very real differing incomes around the world, how could a $50 tonne price by 2020 (in merely 6 years time) work out without causing enormous further material marginalization to already marginalised persons?

    You could buy a lot of abatement in the developing world for $50tCO2e … That wouldn’t marginalise people.

  44. ZM
    October 29th, 2013 at 23:02 | #45

    @Fran Barlow
    Do you mean a kind of global version of the carbon tax ( would you put a cap on as well?) – whereby the tax is redistributive from developed to developing countries, and where you could ensure that this redistribution went to poor people rather than local elites?
    I’m not sure how that would affect global/national economies – they would certainly change…
    But that doesn’t seem to be what JQ is suggesting, because he connects it with the Australian economy staying the same or growing…

  45. Phil Walker
    October 29th, 2013 at 23:25 | #46

    @Ernestine Gross .

    If Jim Rose has a degree in science, and especially in biology, he should hand it back…

    …that is, if he doesn’t mind being done for counterfeiting.

  46. Donald Oats
    October 30th, 2013 at 04:09 | #47

    Doh! I clicked on the first link in Pr Q’s post, started reading, and now I’m wiping muesli off my computer screen and keyboard. Oh, the stupid…

  47. Hermit
    October 30th, 2013 at 06:59 | #48

    The carbon problem is partially self correcting through depletion and perhaps NIMBYism in the case of fracking. Pundits seem to think that NSW will not have enough gas in 2016. World liquid fuel production is on a volume plateau of about 90 million barrels a day but the peaks for conventional crude oil and combined net energy were several years ago; ethanol for example has negligible net energy. On the other hand Victoria’s Latrobe Valley is said to have 500 years of brown coal reserves. Loy Yang power station claimed it would be Australia’s cheapest electricity generator even if carbon tax were to double i.e. to around $50.

    Therefore there is an early mover advantage to de-carbonising. Oil imports into Australia and gas in NSW could show supply shock behaviour with rationing. An orderly transition is far preferable. The trouble is Joe Public doesn’t think it is necessary then again JP fails to prepare for floods and bushfires. Some expect the world gas peak in 2030 and the world coal peak in 2040. Peak crude oil was 2005. After 2030 or so millions may no longer be able to afford products based on fossil fuels so we should prepare now, climate change or not.

  48. BilB
    October 30th, 2013 at 07:37 | #49

    If you live up there in Qld, Hermit, you should know that ” ethanol for example has negligible net energy” is completely false. The rest of your argument seems sound.

    I like the tone of realism that you are hitting in this thread, JQ.

    I have been nosing around in the Libertarian camp recently. It is all testosterone, absolutely no endorphines, and probably not a single degree between the lot of them.

  49. ZM
    October 30th, 2013 at 08:14 | #50

    @ Fran Barlow, I think this issue of global redistributive logic was part of the Stern discounting debate (which obviously I don’t understand fully). I think perhaps people from both sides criticised Stern b/c if the discount rate or the assumptions behind it (sorry, not an economics person) were taken to their implicit logical end, that global redistribution as well as saving would be an imperative. Perhaps this i my misunderstanding of the debate?

  50. Michael
    October 30th, 2013 at 08:14 | #51

    It’s an interesting and unexpected place the climate change issue is in at the moment. In 2007 both major parties were promising an ETS and there was a lot more active discussion about where emissions were being produced and what would be the most effective strategies to reduce them.

    Now in 2013 with the science moved further along and the skeptics side reduced to cranks and astroturf organisations the debate is about whether should we even pretend to do anything about it. Quite extraordinary. The only hope is that the public ‘s fickle attention will swing wildly and unexpectedly back in the direction of being responsible. Abbott is almost certainly going to be Australia’s worst PM. The question remains as to whether Bill Shorten will be the most spineless opposition leader.

  51. stephen
    October 30th, 2013 at 08:28 | #52

    As I read the comments attributed to Warwick McKibbin, he was against both approaches, but would be in favour of well designed carbon pricing. If by inference we could conclude he would also be in favour of well designed direct action, that would mean his position is pretty similar to that @Richard Denniss (!!!). The problem in the survey was that it inevitably played into the polarisation of the political debate (leading to ‘economists disagree with Tony Abbott’ headlines) whereas the issues are more complex. There are direct measures that clearly will be helpful, and increase response options for the future. The basic insight from economics – price signals help change behaviour – can be applied in different ways. In other words, taking an either/or approach is not helpful.

  52. Uncle Milton
    October 30th, 2013 at 09:38 | #53

    It was interesting to see that one of the few economists who favoured the Government’s policy also revealed himself as a sceptic on the science. Perhaps he has a degree in physics/chemistry as well as as economics. He also said that market solutions were not the right answer to the problem. This chap, who works for a large financial institution, is often in the media as a commentator on what is going up and what is going down in the economy. At this task, he is no better or no worse than the other financial market talking heads, but his intervention in this debate is a stark reminder that economists should stick to their areas of expertise. Just because you can say something sensible about the latest monthly car retail sales data doesn’t mean you know anything about the design of markets or policies to fix externalities.

  53. Uncle Milton
    October 30th, 2013 at 09:42 | #54

    JQ, it would be good to get your take on Nordhaus’ recently published book, The Climate Casino. Krugman gives it a reasonably positive review in the NYRB.

  54. ZM
    October 30th, 2013 at 09:56 | #55

    Krugman on Nordhaus
    “Throughout this book, Nordhaus’s tone is slightly cynical but basically calm and optimistic: this is ultimately a problem we should be able to solve. I only wish I could share his apparent conviction that this upbeat possibility will translate into reality. Instead, I keep being haunted by a figure he presents early in the book, showing that we have been living in an age of unusual climate stability—that “the last 7,000 years have been the most stable climatic period in more than 100,000 years.” As Nordhaus notes, this era of stability coincides pretty much exactly with the rise of civilization, and that probably isn’t an accident.”

  55. Fran Barlow
    October 30th, 2013 at 10:02 | #56

    @stephen

    There are direct measures that clearly will be helpful, and increase response options for the future.

    That’s true, but as “DAP” is only loosely specified ATM and those parts of it that are seem unpromising in terms of per dollar abatement and scaleability and maintainability, it’s misleading to group all notional “direct action” under the the TA rubric of “direct action”.

    Moreover, at best DAP can only work on our shores, and as we are so often reminded by the Abbott cohort, Australia in absolute terms relative to the total emissions of the planet, is a very modest contributor.

    One of the things we want out of abatement is a model that others can duplicate and which successor regimes will find hard to furtively subvert.

  56. Fran Barlow
    October 30th, 2013 at 10:25 | #57

    @ZM

    Do you mean a kind of global version of the carbon tax?

    Obviously not. It’s very hard to devise taxes that cross jurisdictions. That’s one of the reasons for going with an ETS, in which a quota is set for emissions for each jurisdiction and it can allow each emitter to emit their share (by bidding for them). If they buy more than they need, they can onsell them to others, recovering their money, and if they underbid, they can purchase more in their market, or in some other market.

    This recognises the reality that CO2 doesn’t respect the political boundaries between jurisdictions.

    If the price set (by the world cap) turned out to be $AUD50 tCO2e then emitters here could choose to do abatement here, or obtain offsets in other markets, including in the developing world. A country that was already emitting below the cap could sell its surplus to the highest bidder and use that to do low-emissions development (perhaps in conjunction with the CDM (Clean Development Mechanism) process or MDGs etc.

    Plainly, you’d want a robust means of auditing these projects to ensure their LCAs had integrity as abatement or equitable development.

  57. ZM
    October 30th, 2013 at 10:46 | #58

    @Fran Barlow
    “If the price set (by the world cap) turned out to be $AUD50 tCO2e then emitters here could choose to do abatement here, or obtain offsets in other markets, including in the developing world. A country that was already emitting below the cap could sell its surplus to the highest bidder and use that to do low-emissions development (perhaps in conjunction with the CDM (Clean Development Mechanism) process or MDGs etc.
    Plainly, you’d want a robust means of auditing these projects to ensure their LCAs had integrity as abatement or equitable development.”

    Would the world cap be some sort of per capita emissions budget per nation? This is problematic internationally because most developed countries have long ago exceeded a per capita budgeting method. If not, what sort of a cap are you suggesting?

    Is abatement the same as mitigation in this context? Mitigation projects within one’s borders are at least controlled by the body politic within those borders (still difficult to maintain over generations) – whereas offsets in other markets are controlled by other political entities and are very problematic, especially when they are often in developing countries with various governmental issues that may lead to lax enforcement etc – eg. the offsets in Indonesia that have pretty completely fallen apart – and are still subject to the problems of maintenance long term.

    The only way a country could emit below the cap would be if the cap was a per capita per nation one (so far as I can see) – in this case looked at historically very significant reparations are already due to developing countries from developed countries.

    To avoid reparations, countries would have to agree on a “year zero” for emissions responsibility – but even if an agreement was reached that 2013 were year zero (unlikely politically I imagine) developed countries would immediately begin to owe reparations from that date. The only way to avoid this budgeting problem would be to have a start date at some point in the future when emissions would be equal.

    Then the questions become How to arrive at this point of equality and What emissions make up this point of equality – a cap might not be needed if they are low – or it may be too late if they are high…

  58. Hermit
    October 30th, 2013 at 10:48 | #59

    Border carbon adjustments are described here
    http://e360.yale.edu/feature/forget_kyoto_putting_a_tax_on_carbon_consumption/2590/
    The starry eyed assure us that China will ease back on coal burning in a few years but I’d like an insurance plan in case they don’t get around to it.

    Another idea for linking carbon pricing schemes is a ‘credibility rating’. Note California decided to link to Quebec but didn’t think the EU scheme cut the mustard. I think the idea is if you want to buy permits from a scheme with a 50% rating maybe that’s a C or D you”d have to buy twice as many.

  59. Stevenp
    October 30th, 2013 at 11:04 | #60

    I despair that fools have stormed the benches of government and taken control of the debate. People of some credential are now treated with disrespect and their ideas ridiculed. This is akin to what happened in the US when Bush Jr became president. 8 years of stem cell research lost, religious dogma trotted out in its place. Critics were lambasted by murdock press and labelled unpatriotic. To think, great scientists throughout history had to develop their ideas in secret, risking execution if discovered. It would appear nothing has changed, climate science is being attacked publicly, its champions are scoffed at and solutions ignored. It would appear the denialist solution will be akin to the resumption of human sacrifice to a sky fairy. A carbon tax would have been much easier.

  60. October 30th, 2013 at 11:35 | #61

    @ZM

    Ultimately I think we have to move to a per person cap on CO2 emissions. Which will be good for developing countries.

    However you identify the very real problem of rich countries buying permits from poor countries that have lax carbon accounting practices.

    It is pretty simple really – the rich countries must reduce their emissions. No amount of buying permits from poor countries will solve the problem of increasing atmospheric CO2.

    Maybe we need some sort of hybrid scheme whereby a country can only sell, say, 20% of its permits. This might have the odd side effect of sending energy intensive industries to poorer countries.

    But if we are optimistic, all of this will cease to matter once we’ve moved to a post fossil fuel world. Maybe by 2050?

  61. Fran Barlow
    October 30th, 2013 at 11:38 | #62

    @ZM

    Would the world cap be some sort of per capita emissions budget per nation?

    I’d say so.

    This is problematic internationally because most developed countries have long ago exceeded a per capita budgeting method.

    Then one of our challenges is to get back to that. If we know that total human emissions by a given date must not exceed a given figure, then that figure becomes a limited resource which we must ration. If all humans are equally entitled to a chance at dignified existence, then it follows that we all have to have the same cap.

    In practice that’s difficult because last time I looked, pretty much everyone had to get down to per capita emissions of about 2tCO2e each — which one finds exclusively in the poorest parts of the world, who, not unreasonably, want much of what we’re having now and are entitled to resent that reality that the budget is where it is because the wealthy countries chewed through so much of the budget between 1950 and 2000 when they should have known and done better.

    So step 1 would involve radically closing the gap between the emissions of the first world and those of the developing world, by investing in low carbon development for growth over there and abatement here. In order to buy some time while we are over what is reasonable, we probably have to develop some geo-engineering tools for stauinching insolation and maybe increasing both albedo and drawing down CO2 from the atmosphere. That might allow us to temporarily emit a lot more than we should, but prevent us losing the permafrost and starting a new positive feedback cycle.

    A country like Nigeria for example desperately needs a reliable supply of stationary energy to do development. As things stand, much of their population goes without power for much of the time and what they are doing is burning astonishing amounts of oil, which is not only expensive but highly polluting — and not just in relation to CO2. Yet in per capita terms, their emissions were officially 0.5t per person p.a. I suspect the accounting here is not so robust.

    A scheme to provide low emissions stationary power and low emissions transport within the country under CDM could be funded by the issue of permits if suitably accounted and simultaneously improve the quality and standard of living of most Nigerians. If it reduced the burning of oil the country could export more of its oil and become a good deal more self-sufficient. We’d be doing social justice and environmental improvement at the same time.

  62. ZM
    October 30th, 2013 at 11:55 | #63

    @Fran Barlow
    ” If all humans are equally entitled to a chance at dignified existence, then it follows that we all have to have the same cap.”
    I agree with this, but the devil is in the details as they say. The UN does not currently have the legal authority to implement this globally, so you’re looking at individual countries or formal networks of countries (such as the Commonwealth) – arriving at a point where the crown/state’s authority to implement this on a long term basis is not going to be overwhelmed by the force of more or less powerful dissenters to the proposed regime ( such as, I’d imagine – perhaps he could qualify – the boldly immoral/amoral Jim Rose).
    I would like it to be otherwise, but I’m unsure this will be at least in the near term a matter in which there is no dissent…

  63. ZM
    October 30th, 2013 at 12:02 | #64

    Beyond zero energy have some concrete steps for Australia to lower carbon emissions significantly, and I saw a talk of theirs on land planning needs (like JQ great reductions in cattle [and also sheep] farming were canvassed – with reforestation being implemented to draw down carbon) which was at that time unpublished – not sure if it’s available now.
    But even within Australia, unless there’s some sort of constitutional ruling supported by the Judiciary if the High Court, the bearer of the Crown, the military/police and some segment of the populace that are prepared to protest in support – I don’t see how we can get to a position where these plans can even begin to be implemented?

  64. John Quiggin
    October 30th, 2013 at 12:25 | #65

    @Uncle Milton
    I read the Krugman review. It’s clearly a big shift from Nordhaus, who used to be Lomborg’s favorite economists (to be clear, that doesn’t mean that Nordhaus approved of Lomborg)

  65. October 30th, 2013 at 12:28 | #66

    Are any Australian universities taking steps to revoke the degrees of those who clearly don’t deserve them?

    Perhaps there could be a scheme of demerit points for foolish utterances, combined with loss-of-degree for too many points lost or for committing the intellectual equivalent of driving under the influence of alcohol or a drug.

  66. may
    October 30th, 2013 at 12:47 | #67

    Jim Rose :Let climate science be settled. How much will global warming cost is the correct question for policy debate.
    The chances of India, China and the rest of the Third world agreeing for forego or even slow economic development to fight global warming is zero even before you consider the international collective action, verification and free rider problems.
    Adaptation and richer is safer are the only games in town. Climate change will be mostlly a threat to the poor in poor countries.
    Tom Schelling posed this question:

    “Suppose the kind of climate change expected between now and, say, 2080 had already taken place, since 1900.
    Ask a seventy-five-year-old farm couple living on the same farm where they were born: would the change in the climate be among the most dramatic changes in either their farming or their lifestyle?
    The answer most likely would be no. Changes from horses to tractors and from kerosene to electricity would be much more important.”

    changes from horses to tractors happened before the “dustbowl”soil loss disaster in America.
    the people who endured this would probably strongly disagree with your assessment of importance of changes.

    being rich only means in the light of wide spread disruption of climatic patterns,that the price of apparently safe places will rise and competition for such places increase and the need and cost to defend such places not something i would be able to quantify.

    but you could give it a go.

    given you seem to think that the cost of the climate pattern disruption can be arrived at.

  67. Fran Barlow
    October 30th, 2013 at 14:13 | #68

    @ZM

    so you’re looking at individual countries or formal networks of countries (such as the Commonwealth) – arriving at a point where the crown/state’s authority to implement this on a long term basis is not going to be overwhelmed by the force of more or less powerful dissenters to the proposed regime

    In the past, I’ve suggested there could be something like “break out groups” in which wealthy high emitting countries are paired with their poorer trading partners and other jurisdictions having some complementarity with the rest of the group. I’m thinking of groups composed of perhaps no more than 14-15 jurisdictions or covering populations of around 150 million outside the largest member.

    The aim of each group would be to

    a) specify a target and a timeline in conformity with the overall global budget
    b) ensure that no member had unreasonable burdens of abatement settled on them, having regard to the PC GDP of each
    c) ensure that each member stayed with the group targets with a right to differentially trade with them if they fell out of conformity
    d) to negotiate as a bloc with the other blocs over global abatement policy and targets
    e) set up emissions trading within the bloc and between blocs

    Creating smaller complementary cross jurisdictional groupings could make resistance from the hold-outs harder, and certainly, one can imagine big emitters like China liking such an arrangement, and this alone spurring others to become more pro-active.

  68. rog
    October 30th, 2013 at 16:01 | #69

    The frustration is evident in Bernie Fraser’s address but its specks on the windscreen for the ‘get outa my way’ LNP

    “They go home at night to their comfortable, well-appointed homes, they talk amongst themselves, they socialise together, they don’t understand what my team and I understand, and that is Queenslanders have had enough.”

  69. ZM
    October 30th, 2013 at 16:20 | #70

    @Fran – but how do the individual and collective break out groups get to that point? You’ve looked at dissent between countries/groups – but what about the significant overt or implicit (ie. yes, I support action on climate change if it doesn’t affect my material standard of living) dissent within countries?

    @Hermit
    While I don’t agree with a lot in the piece you link to, it does contrast with the Climate Authority’s draft report which seems to tally things up according to production (excepting shipping and air travel [which should be attributed to the traveller's place of citizenship, or the good's final destination] which developing countries complain about as well).

    Helm:
    “It is carbon consumption that measures the carbon footprint and hence responsibility, not the carbon production in particular geographical areas. Yet remarkably the Kyoto framework does not take consumption into account. Instead it focuses on carbon production, and mostly in Europe, where deindustrialization and the collapse of the former Soviet Union make compliance with the targets easy. For example, the UK’s carbon production fell by more than 15 percent between 1990 and 2005, but once imported carbon is taken into account, carbon consumption went up more than 19 percent. This explains how carbon production can be falling in Europe in line with its Kyoto targets, while global carbon emissions keep going up.”

    CCA:
    “China is the world’s largest emitter and the world’s second largest economy. Its per person emissions are around the global average. With $118 billion in two-way merchandise trade in 2012, China is Australia’s largest trading partner.

    [EU targets] rnational: 20 per cent relative to 1990. Conditional target of 30 per cent relative to 1990.
    Domestic: Many European Union countries have climate targets included in legislation or national plans. The European Union also has agreed to a formal ‘burden sharing arrangement’ for some of its collective climate targets.”

  70. Hermit
    October 30th, 2013 at 17:02 | #71

    @ZM
    Something is amiss when we can send WA iron ore to China as well as Qld/NSW coking coal then re-import steel made with our own ingredients. Sure China has lower wages and economies of scale but also a current lack of serious carbon penalties whatever their noble intentions. The Gillard govt gave Bluescope and OneSteel/Arrium 94.5% carbon tax exemption and other sweeteners yet neither has an assured future. Therefore I suggest Chinese or Indian steel is assumed to have caused about 2 tonnes of CO2 per tonne of product. On arrival in Australia it gets slapped with 2 units of the current carbon price and I believe anti-dumping laws can easily handle this.

    Of course that may not save the Australian steel industry in which case they could get extra cash gifts like the car makers. Maybe not from TA. The beauty of this system is that should Asian steel makers go elsewhere for coal and iron ore it doesn’t matter they will still get penalised until they get their own serious ETS or whatever. Of course it would be nice if Clive & Gina left their Queensland coal deposits in the ground and the Great Barrier Reef was not acidified, silted and bashed.

  71. ZM
    October 30th, 2013 at 17:17 | #72

    @Hermit
    Isn’t this partly by design of the economic system? in Australia I imagine we consume considerably more embedded labour than we undertake ourselves. I would think that most developed countries are the same (maybe not Germany???). I can only presume this was the intention of the reforms of economic rationalism and why Keating finds it galling that Labor doesn’t hold the support of the vast middle classes it helped to create…

  72. Jim Rose
    October 30th, 2013 at 18:41 | #73

    @Ernestine Gross The next century’s worth of climate change will cost the equivalent of two years of economic growth or thereabouts.

    The economic literature on climate change is small. It is small because it is poorly funded. It is poorly funded because governments do not like the answers it gives.

    Much of the damages estimated by Lord Stern in his report occur after 2200, and not a trivial amount occurs after 2800 when we are all zipping around star trek style.

    When will current policy actions to mitigate global warming through reductions in carbon dioxide (and other greenhouse gases) have a detectable effect on climate?

  73. October 30th, 2013 at 19:16 | #74

    @Jim Rose

    I don’t think so Jim. You have to have a serious case of the pollyannas to think that.

  74. Fran Barlow
    October 30th, 2013 at 20:16 | #75

    @ZM

    but how do the individual and collective break out groups get to that point? You’ve looked at dissent between countries/groups – but what about the significant overt or implicit (ie. yes, I support action on climate change if it doesn’t affect my material standard of living) dissent within countries?

    Well the LDCs have an interest in development, and if it is clean development, then it’s easier to persuade their populaces. The major emitters have populations whose standard of living will decline in most climate change scenarios and who may find themselves facing the challenge of displaced persons seeking resettlement.

    China faces serious food and water shortages and while they are good at managing dissent, they certainly don’t want any serious problem supplying food.

    I suspect that most already understand that our current standard of living is not sustainable and the longer we try to artificially sustain it the less that is left for those who follow us. It is an unpalatable reality and of course many try for cognitive dissonance but in the end, people will accept it. What’s needed is a way of breaking the logjam so that nobody can say of their state that its action is unilateral and futile.

  75. ZM
    October 30th, 2013 at 21:02 | #76

    @Fran Barlow
    Just back from a talk by Germaine Greer on her new book.
    “but in the end, people will accept it. What’s needed is a way of breaking the logjam so that nobody can say of their state that its action is unilateral and futile.”
    Well, I am not sure at what point in time “people” (every person? The majority? Just enough?) will come to accept it, and whether there would still be time.
    Western civ has been notoriously unshy of crossing cultural and natural thresholds, and look at how the ancient Greeks, so few compared to the global numbers today, argued about so very much…
    In terms of a way to challenge the statement of action being unilateral and futile, this is why I think looking into the constitutional responsibilities of the Crown to its subjects’ heirs might be helpful – because it is the Crown of 16 Commonwealth realms of varying levels of development, spread over the globe. But even if there was a case for that responsibility, other support would be needed. And often the people who support the crown are not the same people who support strong action on climate change…

  76. Nick
    October 30th, 2013 at 21:04 | #77

    @Jim Rose

    “The next century’s worth of climate change will cost the equivalent of two years of economic growth or thereabouts.”

    Jim, assuming this is a follow-on from your previous comment, you’re concluding this from an essay Schelling wrote in 1992.

    In 1997 he used the same illustrative device for effect, but instead referring specifically to climate mitigation costs:

    Still, if one plots the curve of U.S. per capita gnp over the coming century with and without the two percent permanent loss, the difference is about the thickness of a line drawn with a number two pencil, and the doubled per capita income that might have been achieved by 2060 is reached in 2062. If someone could wave a wand and phase in, over a few years, a climate-mitigation program that depressed our gnp by two percent in perpetuity, no one would notice the difference.

    So – by that same logic, you should have absolutely no problem with attempting to mitigate climate change either.

  77. Nick
    October 30th, 2013 at 21:08 | #78

    Or, am I being too clever for my own good here?

    Crap – I’ll let you read and tell me Jim ;)

  78. Nick
    October 30th, 2013 at 21:15 | #79

    Nope, I was right the first time. Schelling views mitigation costs as a mere drop in the bucket: “a few trillion dollars over the next 30 or 40 years, out of an oecd gross product rising from $15 trillion to $30 trillion or $40 trillion annually.”

  79. Hal9000
    October 30th, 2013 at 21:32 | #80

    @Jim Rose
    Surely you know that reducing carbon emissions merely mitigates climate change. We are already doomed to two degrees. Your question is therefore mischievous.

  80. Mel
    October 30th, 2013 at 22:05 | #81

    SBS had an interesting doco on tonite about AGW’s twin problem- ocean acidification. There is already plenty of field data to show that this is already having an impact on ocean life.

    Happily, while much of the news is bad news, some is good, for examples sea grasses benefit from CO2 fertilisation and this in turn is good for many fish. Also interesting to note that a sea urchin off the California coast has adapted to higher CO2 emissions by becoming a much more efficient calcifier. However it is unlikely all beasties will be so lucky.

  81. October 31st, 2013 at 04:08 | #82

    Mel, while I appreciate your observation, I suspect to think in terms of positive and negative feedbacks, we have to set in train the re-establishment of the condition of overall global atmospheric energy equilibrium. This will not happen readily or tomorrow. If this contention is correct, it is argument against further delay and denial, a proposition that falls on the deaf ears of the mentality of the Federal Government. It is a problem that equally increases with the passing of time.

    As for handing back, whatever credentials I might have been given, there would be an understandable feeling of disappointment. I don’t know I would do it.

  82. Alan
    October 31st, 2013 at 06:19 | #83

    @Nick

    In any choice between two states of the world, where one of those states of the world involves a perverse reading by Jim Rose of a linked article, it is a reasonable decisional protocol to select the state of the world that includes a perverse reading.

  83. rog
    October 31st, 2013 at 07:06 | #84

    Unfortunately Paul Frijters appears unable to be objective

    You get the inevitable quasi-religious stories linking disasters to ‘sin’, essentially via a simple morality-play argument of ‘you have sinned, so now you are punished’.

    ..The first off the block this time round was Christina Figueres, a UN climate change marketer, wagging her finger at Australia, telling CNN reporters there was ‘absolutely’ a link between climate change and wildfires.

    Christiana Figueres was misquoted and Fritjers appears to rely solely on that misquote.

  84. Hermit
    October 31st, 2013 at 07:19 | #85

    A US view of Australia’s carbon shenanigans
    http://theenergycollective.com/roger-pielke-jr/295276/australias-climate-follies-abbott-government-bellwether-global-carbon-debate
    It seems likely things will get even more bizarre when/if Abbott attempts to implement Direct Action.

  85. Ken Fabian
    October 31st, 2013 at 07:53 | #86

    Does Burchell Wilson (Australian Chamber of Commerce) rate as one of the ones who should hand his degree back? I haven’t managed to find a transcript of his comments at Eastern Australian Energy Outlook Conference but they were described as-

    “That was one of the most deceptive, disingenuous and manipulative presentations I have ever seen,” said Andrew Richards, the external affairs manager for renewable energy investor Pacific Hydro. “It was almost comical.”

    From Giles Parkinson at RenewEconomy

    …the renewable energy target was “crazy”, “an ugly baby”, and “bad policy” that could only be justified by an “ideological predeliction towards renewable energy.”

    This was a view, Wilson claimed, that was “largely uncontentious”. There were “no economists I know who is not an ideologue who disagrees with that.”

  86. Fran Barlow
    October 31st, 2013 at 08:27 | #87

    @rog

    Christiana Figueres was misquoted and Fritjers appears to rely solely on that misquote.

    She was misreported by Abbott but the quote you use is accurate, because there is a link between climate change and wildfires. What she didn’t say was that these NSW fires we were experiencing were a product of climate change, although in all probability, they are.

    The problem with Frijters is that he doesn’t appear to be willing to read things that don’t support his claims. The Figueres remarks make no allusion to sin and punishment. Frijters ought to be embarrassed, and if he has a degree implying literacy he opught to hand it back.

  87. BilB
    October 31st, 2013 at 08:43 | #88

    What she actually said, Fran, was that these fires were not STARTED by climate change, but climate change provided the conditions for them to persist.

  88. Donald Oats
    October 31st, 2013 at 08:49 | #89

    Another factor to consider in this farce of a climate change policy is that our immigration rate ensures we have another 1.5 to 2.5 million people in Australia by 2020, and if our baby-bonus birthrate is above the natural deathrate, then Australia will be a substantially bigger place by 2020.

    If our energy and power needs continue on their long term trajectory, Australia’s 5% reduction of emissions against the base is going to be a challenging exercise. The tragic part of the equation is that we really need to be pushing for something even more substantial, such as 20% reduction against the base.

    We’ve seen an awesome uptake in PV-solar for houses, with a 10% coverage in South Australia, for example. Dismantling of subsidies and other inducive policies for renewable energy uptake will certainly put a dent in the growth rates: the question though, is what if we kept the subsidies in place for the next 5 or 10 years? Would that be more cost effective as a strategy than direct action strategies? If we reached a target of say 25% coverage in the states with the best sunlight conditions, and say 15% elsewhere, would that be more effective in 2020 compared to direct action (with its fixed budget and one-off nature)?

  89. ZM
    October 31st, 2013 at 08:56 | #90

    @BilB
    “What she actually said, Fran, was that these fires were not STARTED by climate change, but climate change provided the conditions for them to persist.”
    If you accept anthropogenic climate change, then all climatic conditions since climate change began are provided by it. There is no longer a non-anthropogenic climate in play.

  90. BilB
    October 31st, 2013 at 09:29 | #91

    I like your #18 in principle, Fran. That would enable better decision making with achievable targets.

  91. Hermit
    October 31st, 2013 at 09:54 | #92

    @Donald Oats
    It’s interesting that our population growth in the last few years has been 1.6% pa and that is also the average of the avowed 80% emissions cut over the 50 year period 2000-2050. If new citizens can be presumed to need low carbon energy as much as those of us already here the per capita emissions reduction effort is closer to 3.2%.

    As to SA retaining renewables subsidies the lesson from Germany is not encouraging. The levy which pays the federal feed-in tariff is now up to about $30 bn a year yet emissions have increased slightly. Their disconnections run at about 300,000 per year I believe. If SA end-user power prices keep increasing I expect Holden to up stumps for somewhere like Asia. SA will be fashionably green just no jobs for young people.

  92. Ernestine Gross
    October 31st, 2013 at 10:38 | #93

    There are ‘direct actions’ and there are ‘direct actions’. The former is not really known to me as yet. From what I know, it seems to involve a misapplication of the notion of ‘willingness to pay’ to give subsidies to energy producers to adopt less ghg polluting production methods.

    The latter, to be identified shortly, are known in economics as legislated quantity constraints – on energy usage in this instance.

    The latest example of the latter type of ‘direct action’ I’ve come across involves vaccuum cleaners. The EU Commission issued a directive, as of 1 September 2014 all vaccuum cleanrs that are sold must use less than 1600 watt and as of 2017, the maximum allowable quantity is 900 watt. According to the Sueddeutsche Zeitung, 26/10/2013, the EU manufacturers are not worried about this directive. They had been consulted as to technological feasibility. Oddly, at least one politician objected on the grounds of too many regulations.

    Clearly, this measure, as well as a long list of previous directives regarding household white goods, is intended to supplement the EU cap and trade carbon emission system.

    This form of ‘direct action’ measure provides interesting work for engineers and technicians but little work for corporate accountants and lawyers in local economies with extensive manufacturing enterprises. There is no subsidy paid to the manufacturers. The incentive is very clear: develop new technologies or shut down.

    This form of ‘direct action’ belongs to regulation providing a ‘binding constraint’ for all industry members to innovate. They can differentiate themselves in terms of the sucction capacity of their vaccuum cleaners, subject to the common energy usage constraint.

    This field provides so many interesting economic sub-problems. I like it.

  93. October 31st, 2013 at 15:22 | #94

    Direct Action, or Constructive Program in Gandhian terminology is doubtless important, and given twenty years would be fine. However, swadeshi will not cut it in relation to Climate Change which demands action of sufficient scale and is constrained by time. Those entrusted with the national and global well being have to move from denial, word games, PR tricks and other nonsense, to an acceptance of reality.

  94. ZM
    October 31st, 2013 at 15:30 | #95

    Hermit
    “of the avowed 80% emissions cut over the 50 year period 2000-2050. If new citizens can be presumed to need low carbon energy as much as those of us already here the per capita emissions reduction effort is closer to 3.2%.”
    Does this affect the modified contraction and convergence model as recommended by the climate change authority’s draft report?
    Even assuming the modified approach was fully implemented – what would it look like? ” The modified approach provides some ‘headroom’ to allow high-emitting developing countries to make a more gradual adjustment. All countries converge to equal per person shares by 2050.”
    what would global per capita emissions look like – 20% of the current per capita Australia per capita globally?
    What would total global emissions be in this scenario? It *seems* like that would still be quite high to me, given the likely global population, but I can’t do the maths.

  95. Fran Barlow
    October 31st, 2013 at 15:50 | #96

    Speaking of Ernestine’s “direct actions” I recall hearing, perhaps in early 2007, on BBC that the trade in bottled water between the UK and Australia involved us experting to them 500 million bottles of water and importing about 450 millions bottles of water.

    I read subsequently that the world bottled water trade was worth about $3.4trillion (presumably this would include domestic sales).

    Now I’m rather less inclined than most on the left to propose banning stuff, but it seems to me that this is one thing the world could mostly do without. The only thing the manufacturers of the product are adding is wasteful packaging that mostly ends up in landfill and the sea, requires, some estimate, about three times as much water as anyone can drink from each bottle, per bottle, a whole bunch of carbon miles and embedded dossile fuels in the plastic and so forth.

    In the 1970s when Perrier first tried bring the stuff in it fell flat and they proposers had to pretend that bottled water was better for you. Certainly, in first world countries, where most is sold, there’s little evidence that someone who buys bottled water does so because they lack ready access to potable water.

    A first step though might be to bar exports and imports of bottled water, save where a compelling case for an exemption could be made. If the UK-AUS trade flows are like they were back then, a whole bunch of waste could be foreclosed.

  96. ZM
    October 31st, 2013 at 16:21 | #97

    I can try to do the sums, but my maths may be wrong, or my understanding if the convergence model may be wrong…:

    “For the year to June 2012, our national inventory emissions per capita were about 24.4 tonnes carbon dioxide equivalent (CO2e) per person. Only a few countries in the world rank higher — Bahrain, Bolivia, Brunei, Kuwait and Qatar.”

    20% of 24.4 tonnes = 4.88 tonnes per capita

    Current global population is approx. 7,189,000,000
    4.88 x 7,189,000,000 = 35,082,320,000 tonnes

    “13 June 2013 – The current world population of 7.2 billion is projected to increase by 1 billion over the next 12 years and reach 9.6 billion by 2050, according to a United Nations report launched today, which points out that growth will be mainly in developing countries, with more than half in Africa.”
    4.88 x 9,600,000,000 = 46,848,000,000

    10 June 2013 Reuters “Global carbon emissions hit record high in 2012. Worldwide carbon emissions rose to 31.6 billion tons, according to estimates from the Paris based IEA”

    31,600,000,000 < 35,082,320,000 < 46,848,000,000

    Under this convergence by 2050 model (if it is to reduce Aust per capita emissions by 80% by 2050 and converge emissions globally) global carbon emissions would grow not decrease :(

  97. ZM
    October 31st, 2013 at 16:46 | #98

    Then I look to the CCA draft report, to see what it happens to say about 2050 per capita/global emissions.

    I can’t copy the figure, but FIGURE 9.4: reLAtIONShIPS betweeN 2020 tArgetS, 2030 trAjectOrIeS AND NAtIONAL eMISSIONS CHb9u.4DRgEeLtASTIONSHIPS BETWEEN 2020 TARGETS 2030 TRAJECTORIes AND NATTIONAL EMISSIons budgets (p . 102) is illuminative.

    Global carbon emissions cease between 2040 and 2050 in all scenarios, except one – about which the authors state”° A 40 per cent 2020 target would also keep open stronger budgets, but represents a very steep jump from Australia’s current position. The argument that anything more than a 35 percentage point jump between targets
    10 years apart is too large rules out both 5 and 40 per cent 2020 targets for Australia.”

    Now I am confused – less than 36 years does not seem very long to get from current emissions to zero emissions. Especially when developing countries are expected to put in place infrastructure during the first part of that time that will increase their current emissions – and then will – abracadabra open sesame magic of the markets – get to zero emissions by 2050.

    But the blasted report gives no practical indications of how this transition is meant to happen – grrrr. AND the appendices are not published to look at :(

  98. ZM
    October 31st, 2013 at 18:57 | #99

    Two Ways of Looking at a US Presidential Speech

    CCA Draft Report:
    “In June 2013 President Obama announced a new Climate Action Plan, in a speech that mentioned Hurricane Sandy and the necessity for immediate federal climate leadership. The Plan aims to reduce US emissions, prepare for the domestic impacts of climate change and increase international climate cooperation. It uses the President’s executive powers to increase regulations on new and existing power plants, accelerate renewable energy development on public land, and direct federal agencies to use more renewable energy and increase their energy efficiency. The combined effect of these measures could be significant – the power plant regulations could prevent the construction of new coal-fired power plants without carbon capture and storage technology.” P.51

    A Report citing the views of Stanford professor Mark Jacobson:
    “President Barack Obama gave a high-profile speech this afternoon at Georgetown University in Washington, DC, to announce a massive new government plan designed to address climate change. But the plan, details of which were released by the White House on Tuesday morning ahead of the president’s speech, won’t do much to help fix the problems of pollution and global warming, and may actually make things worse overall, according to independent climate experts.

    “IT’S AMAZING HOW LITTLE THIS ALL ACTUALLY DOES.”

    “It’s amazing how little this all actually does,” said Mark Jacobson, a professor of civil and environmental engineering at Stanford University. “In many ways, this makes things worse.” Jacobson, who has spent years researching the link between air pollution and human health in the United States, points out that the White House’s seemingly bold objective to curb carbon pollution by 3 billion metric tons by 2030 through efficiency standards for appliances and federal buildings*, actually equates to cutting about one-fortieth of all pollution produced by the US energy sector each year. “The numbers are so trivial, it’s almost like a gimmick,” he said. Another part of the White House’s plan, to increase the amount of renewable energy projects on federal lands enough to power 6 million homes by 2020, is “embarrassingly trivial,” in a country of over 130 million housing units, said Jacobson.”

  99. Hermit
    November 1st, 2013 at 08:02 | #100

    @ZM I’m wading through the CCA report and I haven’t come across ‘contraction and convergence’ yet. First up I think the boat arrivals are telling us they want to live like Aussies i.e. with 5 kw of average direct and indirect power consumption. The world is now consuming 17 Tw but if just China and India consume like Aussies that is 2.5 bn X 5 kw = 12.5 Tw. We’ll need to double global power output.

    I question whether the currently well-off or those aspiring to middle class will willingly accept a frugal level of consumption. No personal car, no air travel, less thermal comfort at home. This is why we won’t give up cheap coal. If the election can be taken as a referendum on frugal energy use I think the public is saying they don’t want to make sacrifices.

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