Home > Economic policy, Environment > From derp to denialism

From derp to denialism

September 21st, 2014

Over the last couple of weeks, I’ve seen four major reports (details over the fold) from very different sources, all making the same point: decarbonizing the world economy will involve economic costs that are
(a) small; and
(b) far outweighed by the benefits
And, the empirical evidence so far is strong. The EU and US have both reduced CO2 emissions significantly, at negligible or even negative economic cost. The measures announced by Obama, including vehicle emissions standards and restrictions on coal-fired power stations appear set to achieve further substantial reductions, again while yielding net economic benefits.

Against the expectations of doubters, wind and solar PV are steadily increasing their share of electricity generation, to the point where they constitute the majority of new installations in many countries. Again, the costs have been trivially small: in Australia’s case, made up almost entirely of the reduction in asset value imposed on existing generators.

There is as far as I am aware, no credible analysis to support the opposite claim (call it the economic armageddon hypothesis) that decarbonization will involve economic costs sufficient to greatly reduce living standards, or, for poor countries, prevent catchup to the developed world. (Again, more detailed argument over the fold.

Nevertheless, past experience suggests that lots of people are sufficiently wedded to the economic armageddon hypothesis that neither this, nor any other evidence will change their minds. I have previously analyzed this unwillingness to respond to evidence in terms of Noah Smith’s Bayesian definition of “derp“: “the constant, repetitive reiteration of strong priors”.

But I no longer think this is sufficient. A central concept of Bayesian decision theory is the separation of preferences from beliefs. That is, your subjective belief about the probability that a proposition is true should be independent of whether (because you have bet on it, or for some other reason) you want it to be true. This is the opposite of what is often called “motivated reasoning” or, less politely, “wishful thinking”.

This, I think, is the central distinction between “derp” and “denial”. Both involve the rejection of factual evidence that would (to a person without strong preconceptions) be overwhelmingly strong. This must involve strong prior beliefs. Denial differs from derp in that these factual beliefs derive from preferences, and are unlikely to undergo any updating. If anything, denial may be strengthened by evidence of the proposition being denied.

This in turn suggests different possible cures. Derp may eventually, if very slowly, be overcome by an accumulation of evidence. By contrast, denial can only be addressed by changing the source of wishful thinking; for example, by convincing rightwingers to stop being rightwingers.

As promised above, here are my sources for the proposition:

First, there’s Pathways to Deep Decarbonization an international collaborative project under the auspices of the UN.

Second, the Better Growth Better Climate report from the Global Commission on the Economy and Climate

Third, this report on Green Growth from the Center for American Progress (covers the US only)

And, most strikingly, this report from staffers at the International Monetary Fund, long the guardian of fiscal rectitude has concluded that for most countries, the local side benefits of reducing pollution would be sufficient to offset the costs for carbon prices up to $50/tonne.

On the other side, I haven’t seen anything that comes close to being a credible source for the economic armageddon hypothesis. What I have seen are

* Lawyerly quibbles with evidence, not internally consistent and always supporting one side of the case (these are too numerous to bother linking)
* Attempts to make small numbers look big, for example by converting annual flows into present values
* Amateur exercises by committed non-experts, riddled with errors. Ted Trainer, whom I’ve mentioned here before is probably the archetypal example
* Rectal extraction: confident pronouncements based on nothing whatsoever

All of these are, of course, the standard argumentative practices of climate science denialists, who are entirely consistent in their treatment of economic issues. Unfortunately, there are also many who, like Trainer, regard themselves as being on the environmental side of the debate but give aid and comfort to its enemies by backing their bogus claims of economic armageddon. At these point, it is necessary to extend the denialist label to cover this group as well.

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  1. David Allen
    September 21st, 2014 at 16:42 | #1

    ‘Rightwinger’ is a mental illness.

  2. Hermit
    September 21st, 2014 at 17:00 | #2

    I agree that the cost of wind and solar have been minor but they remain small; 2.9% and 1.5% of Australian electricity in 2013 according BREE’s July energy bulletin. That publication also points to transport requiring around 40% of our primary energy for which the renewable contribution is currently near zero. If armchair analyses (eg by Ted Trainer) of the decarbonisation task don’t appeal we have the living and breathing example of Germany. Despite throwing massive subsidies at wind and solar of the order 16 bn euro per year and hanging on to 15% nuclear their emissions keep increasing
    http://www.rtcc.org/2014/03/10/germanys-carbon-targets-in-doubt-as-emissions-rise-in-2013/
    Some think on their present trajectory barring recession Germany won’t cut emissions until 2020. Sure they have windy and sunny days when low carbon power dominates then it lapses back into fossil fuel generation. Some say German coal was always on a lengthy phaseout but if they were serious (ie not hypocrites) they’d give it first priority.

    Gas for coal switching in the US shows signs of reversing as gas gets pricier. Our own example is retiring Swanbank gas fired while bringing Tarong coal fired plant out of retirement. I think it’s too early to judge Obama’s emissions rules if some states rebel. That’s some of the real world evidence for the difficulty of the decarbonisation. I think we’ll have to go past a crisis point of either climate change or selective fossil fuel depletion and then scramble to unsuccessfully catch up.

  3. John Quiggin
    September 21st, 2014 at 17:23 | #3

    I wrote this before reading, in the Conversation, this response, which contains essentially no argument beyond an assertion, cited to Stern’s 2006 report, that reductions in emissions at a rate greater than 4 per cent are inconsistent with economic growth. That was a plausible guesstimate at the time, but Stern’s own subsequent work (he’s one of the authors of the UN report I cited) shows it to be false.

    One big factor, obviously, is the startling decline in the cost of solar PV: relative prices now are considerable more favorable than those estimate by Stern for 2050. But, more generally, the Stern review didn’t do much real work on the economics of rapid decarbonization. Relying on this preliminary estimate in the face of substantial subsequent evidence to the contrary is a typical example of “derp”.

    https://theconversation.com/we-need-economic-degrowth-to-stop-a-carbon-budget-blowout-31228

    And following up the research on which this is based, it turns out to be published by Ted Trainer’s Simplicity Institute, and to rely heavily on Trainer’s spurious analysis.

  4. John Quiggin
    September 21st, 2014 at 17:32 | #4

    @Hermit

    Umm, no. German emissions are 25 per cent below 1990 levels.

    http://www.germanenergyblog.de/?p=8414

    To forestall any derailment, I’ll agree that the German decision to scrap existing nuclear is silly (which I’m sure was your point). But that’s not the topic, and any further comments regarding nuclear power will be deleted with prejudice. If you must discuss the topic, go to the sandpits

  5. ZM
    September 21st, 2014 at 17:48 | #5

    The EU only look like they have reduced emissions because they offshored factory production and other industry like steel to other countries. They then import the products and don’t count the emissions. They also do not count the emissions for airplane travel and holidaying abroad. Academic papers have already shown this quite plainly.

    If people in the EU had to reduce their consumptions by equivalent to what they offshored – so they could no longer import embedded emissions and then not count them in their official figures – they would complain grievously about their ensuing poverty.

  6. Ken Lovell
    September 21st, 2014 at 17:58 | #6

    John there are persuasive research findings that people emotionally committed to a particular opinion, when presented with factual data that tends to invalidate their belief, actually become more committed to their error. One of the most persistent mistakes of the whole climate change project has been the belief that if only sufficient evidence can be made available, it will change the minds of the denialists. There is absolutely no reason to think this is the case.

  7. ZM
    September 21st, 2014 at 18:19 | #7

    ” it turns out to be published by Ted Trainer’s Simplicity Institute, ”

    On the website it says “The Simplicity Institute was founded by Dr. Samuel Alexander and Dr. Simon Ussher, who currently direct the Institute.”

    Are you thinking of the same one? Maybe there are two?

  8. themanwithnofingers
    September 21st, 2014 at 18:30 | #8

    When considering the cost of existing or traditional energy creation, such as coal and nuclear, the arguments almost ignore the sunk costs of building the plants, taxpayer subsidies and other non-recoverable costs.

    This distorts the debate as solar, etc are still in the early phases of the business cycle when coal especially is in the cash cow phase.

    It would be nice to compare apples with apples to get a true argument.

  9. Sancho
    September 21st, 2014 at 19:21 | #9

    JQ:

    By contrast, denial can only be addressed by changing the source of wishful thinking; for example, by convincing rightwingers to stop being rightwingers.

    It’s been interesting to watch the denial movement shrug off warnings from the USAF and insurance industry regarding the costs and dangers of climate change. Suddenly, the military and a faction of big business – two sources of unimpeachable wisdom for the right – took the side of the communist traitor scientists.

    Rather than all-out attack, though, the wingers seem to have just ignored it, as though someone had said something awkward over lunch and everyone just wants to move on and forget it.

  10. John Quiggin
    September 21st, 2014 at 19:39 | #10

    @ZM

    If you check Ted Trainer’s listing there, you’ll see he has joint papers with Alexander and Ussher.

    http://simplicityinstitute.org/ted-trainer

    It may be more precise to say it is their institute and that Trainer is a Fellow there. But that doesn’t really change anything.

  11. Ikonoclast
    September 21st, 2014 at 19:43 | #11

    I might indulge in my own wishful thinking. I think a fully renewable energy future (and other sustainables too) would be really exciting. It can’t happen fast enough for me. I subjectively see our current rate of change as painfully slow. Renewable energy is currently growing exponentially but from a very low base. Thus it will take some time to notice real changes subjectively speaking.

    Will Abbott be the last anti-progess, anti-science PM we have? I hope so. We need a game-changing event to speed up needed change. What will that event be? The anti-progress forces of the luddite fossil fuel lobby are very powerful. When and how will their power be broken?

    You see I am not derping tonight. Just wondering and asking broad questions.

  12. Alphonse
    September 21st, 2014 at 21:39 | #12

    It’s either fossil industry acting in the best interests of shareholders (translation: management) or people with “commonsense” saving the world from greenies. (my 2 penneth of derp)

  13. September 21st, 2014 at 22:11 | #13

    John, from a German dollars and cents perspective, Germany’s nuclear shutdown appears to make perfect sense. This is because Germany’s reactors are all located in Germany. A densely populated region of extremely high property values, containing people who are extremely wealthy by world standards, and possessed of a huge economy that is utterly dependant upon a lack of radioactive clouds for continued production. In addition, Germany is surround by a lack of open water and is instead mostly surrounded by other countries that would be likely to get quite shirty if they were accidentally irradiated, no matter how much Boisvert says they should just stay indoors for a few days and thank Germany for giving them a lazy at home holiday. Germany is even emmeshed in a web of laws that would require them to pay compensation to people they irradiate in other countries, even if the people in other countries turned out to be foreigners.

    As a result of all this, Germany was carrying a huge quantity of unfunded liability that could blow up in its face at any time. One estimate of the cost of insurance to cover this liability started at a minimum of 19 US cents a kilowatt-hour. Given the low carbon price in Europe and the low cost of electricity from other sources, shutting down the nuclear reactors made perfect sense from an accounting point of view.

    However, from a moral point of view, it may not make quite as much sense. Nuclear disasters tend to be massively expensive but fatality light as it is possible to evacuate people from irradiated areas and decontaminate them. So Germany has removed the risk of losing vast amounts of money and replaced it with an unknown number of deaths around the world from global warming that will be concentrated in poorer countries and not wealthy ones like Germany. And they’ve replaced economic damage that would be concentrated in Germany and surrounding countries with economic damage that will occur around the world and will be both variable and unpredictable in effect. Now the fact that Germany is part of an emissions trading scheme could be said to make this a wash as any increased emissions that result from the nuclear shutdown will be met by reductions in emissions elsewhere, but from a moral viewpoint, perhaps Germany should have reduced its emissions by as much as it has and in addition kept its nuclear fleet mostly operational to reduce them even further.

    (I must admit this train of thought does make me wonder what Australia would have to do to be considered moral.)

  14. Megan
    September 21st, 2014 at 23:15 | #14

    That decarbonizing the world economy is possible and possible without enormous economic cost or reduction in living standards (theoretically) is “derrr” and has been for ages.

    The “derp” lies with those who think it can happen under the current power systems of society, surely?

    We’ve known for years it can be done but all the evidence tends to show that it won’t happen while ever we have the currently configured system of governance (ie: completely corrupt politicians).

  15. September 22nd, 2014 at 00:02 | #15

    The $50/t-CO2 study convinced me that making small reductions in GHG emissions can have a positive local economic impact on polluters. The only problem is, what the world needs is large reductions in GHG emissions. As per the IMF study‘s abstract:

    On average, nationally efficient prices are substantial, $57.5 per ton of CO2 (for year 2010), reflecting primarily health co-benefits from reduced air pollution at coal plants and, in some cases, reductions in automobile externalities (net of fuel taxes/subsidies). Pricing co-benefits reduces CO2 emissions from the top twenty emitters by 13.5 percent (a 10.8 percent reduction in global emissions).

    A 13.5% reduction is soft denialism. The required cuts in global emissions by 2050, if you accept 2 degrees as a standard (and as noted by the UN report, 2 degrees is already dangerous), are about two thirds, in absolute numbers, and about 75% per capita. But since developing countries are expected to grow massively, even with large cuts in their GHG/GDP ratios, they can’t cut their emissions as much; in the US specifically, the UN report calls for per capita cuts of an order of magnitude, and overall cuts of 85% from 2010 levels.

    This also puts the lie to the idea that a small carbon tax is sufficient, which is what bothers me about the entire US carbon tax discussions. If $57.5/t gives cuts, then how much is necessary to ensure 75% cuts? How much is necessary for 90%? If the Obama administration’s plan of replacing coal with fracking gives 30% cuts (from pre-recession levels) by 2030, what kind of draconian measures are required in the 2030-50 period to achieve 80% cuts, from 0.7 times 2005 levels in 2030 to 0.14 times 2005 levels in 2050?

  16. September 22nd, 2014 at 04:03 | #16

    “I haven’t seen anything that comes close to being a credible source…”

    I haven’t seen anything that comes close to either recognizing the magnitude of political change necessary for the feasible solutions to be implemented or demonstrating how the changes that need to occur can occur without unprecedented political transformation.

    The denialists are not a majority. The catastrophists are not a majority. The obstacles are the institutions that 1. acknowledge the reality of climate change, 2. claim that feasible solutions are available and 3. Pay lip service to implementing the feasible solutions.

  17. reed
    September 22nd, 2014 at 07:00 | #17

    What matters in the case of moving to a new power platform is who pays the cost. Almost every developed country’s national government can borrow the money necessary to pay for substituting clean power for carbon power. It can spend the money by tax cuts, loans, or grants to state-owned or privately owned entities. Under the current condition of savings gluts, almost every economist in almost every country supports infrastructure spending to stimulate growth; call state spending on the new power platform infrastructure spending and most everyone should be supportive.
    Does this state spending constitute an economic cost? If the state asks for consumers to pay for the clean energy at very low prices over a long time, just sufficient to cover the state’s true cost of capital (look at borrowing rates for a proxy), then in almost every country the state spending will be close to zero. Someone can alter this result by applying a net present value calculation but the appropriate discount rate for the USA as a government at present is about two percent/year, which does not belie the point being made here.
    There are nations in the developing world that would have difficulty financing the clean energy platform. The developing nations should provide that financing through an international green bank, as proposed by Al Gore (with me as back up band) to the OECD this summer. Its financing would be repaid over time.
    If the cost of the new power platform is passed to consumers as a high upfront charge, they would object extremely vigorously. If consumers are asked to pay for the new power platform over a long time, so that upfront costs of construction are reimbursed over a long time, as is the case for all major capital expenditures in all industries, then the price to consumers will be about the same as what they would otherwise pay, and much lower than the price indirectly on everyone by the various predations of climate change.
    If the cost is imposed on shareholders of existing companies, it would greatly harm their financial performance. If they are state-owned enterprises, this is not a major concern of anyone. If they are privately owned enterprises, then the focus of concern is limited to a fairly small, if influential, slice of the overall population.
    This is a discussion of costs in business and policy terms; this word cost means something different to economists. Perhaps the practical definition is more useful. Reed Hundt. http://www.coalitionforgreencapital.com.

  18. Fran Barlow
    September 22nd, 2014 at 07:34 | #18

    There never has been any doubt that the world could entirely decarbonise its energy harvest systems. That’s how humanity has lived for most of its existence. The only question that remained was whether the living standards we have now were capable of being reconciled with decarbonisation over timelines long enough for us not to feel guilty about our legacy.

    By the end of the 20th century, low carbon intensity methods of harvesting and deploying energy were sufficiently advanced for us to confirm that this was so. Even if one excluded new nuclear power, the rate at which we could now build all of the other non FHC technologies meant that if societies, collectively, decided to do it, a largely decarbonised energy system that would provide almost all of the service people had come to expect was technically feasible.

    The key constraints have always been political will. The elite benefits enormously from the fear that the middle-classes especially have that their privileges will be diminished in some unquantifiable way. Most of us have become very accustomed to the way things are and if you ask people to “press the button for different” many, and perhaps most, start to find their index fingers trembling. Most fear downside risk more strongly than they crave potential advantage, and zero-rate all risks that aren’t figuratively lapping at their feet or burning their eyes. Cognitive dissonance in the face of existential challenge is very strong.

    War has always been a great motivator for willingness to sacrifice because in that case the existential risk is too hard for the reluctant adopters to ignore, and of course in this case, the boss classes favour waging it. Climate change, unlike war, takes place (in the minds of most) over periods of time long enough to threaten mostly people we don’t know and are never going to know and so many can avoid thinking of it, and imagine that their lives can go on unaffected by its growing drumbeat. That episode of The Simpsons, in which Homer campaigns for Sanitation Commissioner under the slogan: Can’t somebody else do it? was sadly apt for the politics of climate change policy. The fact that a society that opted for clean technology would immediately get a whole raft of ancillary benefits greater than their notional cost seems as lost on most folk as the idea that our current models of usage are unsustainable.

    That’s why we need to work towards a new politics — one that is based on allowing people to become directly engaged with public policy, and its antecedents — salient data and modelling. We can absolutely do clean technology, but what we very probably can’t do fast enough to avoid disaster is clean technology with the advocates of keeping dirty technology and boss class rule more generally in charge. Ultimately, that is why we have made so little progress. The boss class can very probably live well enough in a decarbonised world, but a world in which the operators of the most important assets were the public and where privilege was narrow frightens the crap out of them.

  19. John Goss
    September 22nd, 2014 at 08:03 | #19

    I agree that denialists are denialists mostly because they are right wing. But this brings up the question as to why the right wing ruling class are climate change denialists. Surely they are interested in the survival of human civilisation on the planet too. How is climate change denialism in their interest if they end up with short term profits but at the expense of a dying civilisation and economy? Let me put forward some possible explanations.
    1. They have a higher discount rate. (Incidentally I think this partly explains the slowness of the Chinese Government to act on climate change in the past).
    2. They have the money to adapt to the negative impacts of climate change, and anyway there will be less impact of climate change on the rich, especially in the next 30 years
    3. According to their financial calculus it is better to act on climate change later rather than earlier.
    4. They are risk lovers not risk averse, and anyway what does it matter if 20 or 30% of species are lost as long as humans thrive.
    5. The right wing climate denialists are concentrated in those countries ie Canada, Australia and USA which have more fossil fuel interest than others, and therefore more to lose by the move to renewable energy.

  20. Hermit
    September 22nd, 2014 at 08:10 | #20

    Germany has about 35 GW each of nameplate capacity for PV and wind. According to my inexact sources sunny Australia is thought to have about 3 GW of PV perhaps slightly more wind capacity. The wind and solar contribution to German domestic electricity consumption ranges from about 5% to 55%. We hear about the high points while silence accompanies the lows. The closure of East Germany’s old industries with German unification circa 1990 was a major one-off for emissions reduction.

    A country with a formerly generous approach to clean energy subsidies is Spain. Note that their Foreign Affairs minister attended the recent opening of the Royalla ACT solar farm. It seems they now need other cashed up countries to sell stuff to.

  21. Ikonoclast
    September 22nd, 2014 at 08:11 | #21

    I would like to see John Quiggin answer these questions. I am not trolling or gish-galloping. They are serious questions although they might require somewhat speculative answers. If de-carbonising the economy would be so easy and inexpensive why aren’t we doing it? I don’t mean to prejudge it. It might indeed be easy and relatively inexpensive if we put our minds and economy to it. The question is why are we not doing so? And what will it take for us to do so?

    If it’s technically and economically possible, then the obstacles must be political. What are these political obstacles and how do we overcome them? We seem to need a real seachange in our political economy so we can overcome old capital (vested and invested in old technologies) and promote new capital (investing in renewable energy) and/or we need to change the ownership and power relations of our economy to some extent at least. The de-carbonisation change we need just hasn’t proved possible so far under the current ownership and power relations of our society and economy.

    (Reuters) – “Global carbon dioxide emissions from burning fossil fuels will rise to a record 36 billion metric tons (39.683 billion tons) this year, a report by 49 researchers from 10 countries said, showing the failure of governments to rein in the main greenhouse gas blamed for global warming.

    “Its (Global Carbon Project) 2013 estimate represents a 2.1 percent gain versus 2012 and a 61 percent increase since 1990, the baseline year for the U.N.’s Kyoto Protocol, the only global agreement that places binding limits on national CO2 emission levels.”

    As you can see, global emissions are still rising.

  22. Sancho
    September 22nd, 2014 at 08:24 | #22

    John Goss :
    I agree that denialists are denialists mostly because they are right wing. But this brings up the question as to why the right wing ruling class are climate change denialists. Surely they are interested in the survival of human civilisation on the planet too. How is climate change denialism in their interest if they end up with short term profits but at the expense of a dying civilisation and economy?

    Corey Robin riffed on this recently.

  23. ZM
    September 22nd, 2014 at 08:49 | #23

    Alan Levy,

    The UN Deep Emissions Reduction paper cited also states it scenarios would not meet the 2/3 chance of staying within 2 degrees – they look at 45% reduction of emissions instead:

    “In aggregate, the illustrative initial DDPs devel- oped by the Country Research Partners outlined in this report achieve deep absolute emissions reductions by 2050. Total CO2-energy emissions from the 15 preliminary DDPs already reach a level of 12.3 Gt by 2050, down from 22.3 Gt in 2010. This represents a 45% decrease of total CO2-ener- gy emissions over the period, and a 56% and 88% reduction in emissions per capita and the carbon intensity of GDP, respectively. The interim DDPs do not yet achieve the full decarbonization needed to make staying below the 2°C limit “likely,” defined as a higher than two-thirds probability of success.”

    Australia does not get to zero/negative ghg emissions by 2050
    “In the illustrative pathway, Australia’s energy-related emissions are substantially reduced to 3.0 tCO2 per capita in 2050” NOTE PLEASE The above figure does not include ghg emissions from methane or nitrous oxide – which is not proper ghg accounting because they both need fixing up too!

    Even so – the population of Australia has grown , some projections say to 42,000,000 : therefore Australua’a emissions would be 126,000,000tco2 . If everyone in the world did likewise to Australians in this scenario, carbon emissions in 2050 would be 9.7 billion x 3 = 29,100,000,000tco2. What is the worlds carbon emissions in 2013? 36,000,000,000. AS YOU CAN SEE THIS IS NOT A DEEP CUT BUT ONLY THE VERY SLIGHTEST DROP IN THE BUCKET OF CARBON DECARBONISATION by 2050. ( apologies for the caps I cannot bold or italic)

    it also says they set out to do the modelling based on an economic growth and bau politics model, and did not look at alternatives:

    “The modelling for the illustrative pathway prioritizes continued eco- nomic growth and focuses on technological solu- tions, with less emphasis on change in economic structure or consumption patterns beyond current projections. ”

    NOTE – while the economics in the model are fine and dandy rather than a great economic apocalyptic catastrophe , as I have , shown the carbon emissions cuts are insufficient ! And so far the report has just ignored methane and nitrous oxide!

    This report is so far a very poor example of a report claiming if we just follow bau we will avoid dangerous climate change. The report chooses economic growth over a safe climate. The only saving grace is that it admits doing so so plainly.

    I will read the rest later on the train.

  24. September 22nd, 2014 at 08:59 | #24

    @Ikonoclast
    “Why are we not doing it?” Good question.

    1. It’s only very recently – more or less in the last two years, with rapid drops in the price of wind and solar across the grid parity hurdle – that the net cash costs of transition (ignoring the externalities) have shrunk to zero. Before then, you had to make a girly Pigovian argument about externalities, which could be written off by real and practical men. The penny has dropped in large areas of business; the research departments of Deutsche, Citi, and UBS are renewables cheerleaders. This has been a very rapid change. I hate to use the modish “tipping point”, but for once it just might be true. Sentiment and interest translate into political leverage; Abbott’s war on the RET is failing, as is the parallel war of the Kochs and ALEC on state incentives in the USA.

    2. We are, if you look at the growth rates of renewables and evs. If you look at the shares, they are still low or tiny apart from countries with a lot of legacy hydro.. But the future is determined entirely by relative growth rates, not current shares. And since wind and solar are now competitive more or less anywhere they have feed-in priority, they are no longer dependent on vulnerable subsidies, and their vulnerability to policy shocks is going down.

    I have a nice photo in a post here (advert) of a solar shop in the small town of Katoro, Tanzania. It makes money, and will continue to do well unless stopped by meddling. Multiply by 10,000 African towns.

  25. September 22nd, 2014 at 09:15 | #25

    PS. I forgot:
    3. A political corollary of 1 is that up to now mitigation has been seen as a net cost. Internationally, this created a large collective action and free rider problem. You still hear the argument from denialists: “What’s the point, if China and India don’t do anything?” It used to b ea serious one. The international community has wasted the last 20 years trying to construct a global mitigation agreement to get round the free rider problem. It’s impossible. Fortunately it’s now unnecessary. The five key players (USA, China, India, EU) in a room can agree to phase out coal generation by 2030, and the job is half done. They can rely on self-interest to bring the other 150 countries,including Australia and Canada, on board later.

  26. John Quiggin
    September 22nd, 2014 at 10:24 | #26

    @Alon Levy

    These are 2010 numbers. That doesn’t change the co-benefit calculation much, but it does radically alter the likely impact of a $50/tonne carbon price. Solar PV modules cost around $3/watt then, compared to about $0.50/watt now. The cost of wind has also fallen substantially, though not as dramatically.

    At current costs for renewable, a $50/tonne (roughly 5-8c/Kwh) carbon price would put coal-fired electricity out of business in many locations, including Australia.

  27. Greg vP
    September 22nd, 2014 at 11:41 | #27

    The key paragraph of Alon Levy’s post is the one that begins “[a] 13.5% reduction is soft denialism.”

    This was one of the key charges levelled at Amory Lovins back in the 1980s: his idea of “no regrets” actions leads us only part of the way to where we need to go, while locking in existing technologies and preventing needed investment, so in effect it is self-defeating.

    And the key point in Ikonoclast’s last is “[a]s you can see, global emissions are still rising.” The IEA and BP predict that fossil fuels will supply over 80% of global energy for at least the next 35 years.

    It is naive to extrapolate from current growth rates – anyone with the slightest acquaintance with economic history knows that. Remember the early 1980s, when Japan was going to have twice the GDP of the USA by the year 2000? Or Argentina from 1870 to 1910?

    The curve of the fraction of global energy supply derived from solar and wind power will be sigmoid at the very greatest. The questions are, where will its least upper bound be, and how long will it take before we approach it? I’ve never seen any solid discussion of those two key questions.

    The cost of generation is only one of the issues involved in replacing fossil fuels with (stochastic) renewables. No-one has solid evidence (or even solid reasoning, as far as I can tell) about what things would be like if and when solar and wind are the majority providers of energy.

    I used to believe that we can decarbonise to the required level at negligible or negative cost, but now I don’t. I updated my priors after reviewing the evidence. The quantities of handwavium flying around caused me to change my mind.

  28. ZM
    September 22nd, 2014 at 11:54 | #28

    “It is naive to extrapolate from current growth rates – anyone with the slightest acquaintance with economic history knows that”

    Very true – Extrapolation based forecasts in the 19th c had it that where I live was set to be a great bustling metropolis – this never happened and the town is quite small and population is less now than in the heady days of the gold rush.

  29. Hermit
    September 22nd, 2014 at 11:59 | #29

    The only way I could see a $50 carbon price getting up is with massive tariff protection against Chinese imports. However the high priests will have twitches of the knee joint just at the mention of it.

    All may not be lost because some IPCC emissions scenarios may assume more fossil fuels than we can profitably extract. In the case of coal Caltech engineering professor Dave Rutledge predicts a looming peak
    http://judithcurry.com/2014/04/22/coal-and-the-ipcc/
    To that I’d add the strong chance of an amplifying effect from high oil and gas prices before 2020. Rutledge thinks a likely representative concentration pathway falls between the IPCC’s scenario 2.6 or 1 C median and scenario 4.5 or 1.4 C by mid century. If this is correct it will only be a bit more than a degree warmer by 2050 but there will be widespread energy poverty if we can’t replace coal.

  30. September 22nd, 2014 at 12:22 | #30

    I really wish people wouldn’t use the word “priors” when they mean “biases.” In plain English prior is not a noun except where capitalized and inside a church. That sentence on Bayesian blah blah is tortured analogy at its worse. Somewhere I can hear Orwell’s ghost crying.

    I don’t doubt that the level of decarbonization proposed in the reports is cheap. It’s even more cost-effective when one considers that the effects of global warming are hitting much earlier than expected, so that issues of discount rates and future uncertainty of magnitude are less influential on current cost calculations. The two problems are 1) political resistance to change and the increasingly desperate behavior of the utilities and 2) the later stages of decarbonization.

    re: 1) it appears that price signals are only important when they protect the interests of the rich and powerful, and as solar becomes more competitive we suddenly find a huge range of political and business tools being deployed to ensure that competitive technologies get excluded from the energy economy – utility companies refusing to buy electricity from solar homes is a good example of this, along with e.g. the huge political pressure they tried to bring to bear on China when it announced its new clean coal laws (just as examples).

    re: 2) we have to ask really important questions now about what we need to do to prepare for a zero-carbon future. What kinds of distribution networks will we need, how does town planning need to change now for a world with less private transport and only fully-electric vehicles? What research do we need to be prioritizing and how should we go about doing it? How do we ensure adequate land for agriculture, carbon sequestration and solar power? Will we need to move from national to international markets in electricity to ensure continuity of supply and if so what development will poorer nations in e.g. the southern mediterranean and south-Eastern Europe need to be able to connect with those markets?

    I think people like John are too optimistic about 1) – the way I see it political opposition to solar and wind is going to be an obstacle to its implementation long after cost is not an issue. As for 2) – it’s a conversation it appears no one wants to have. But maybe it will be easier if we can fix the derp factor and at least get people to accept the ideal of a low-carbon future. Maybe once the derpsters see that solar isn’t an economic apocalypse they will come on board to a zero-carbon future without further protest …

  31. ZM
    September 22nd, 2014 at 13:04 | #31

    faustusnotes,

    “1) political resistance to change and the increasingly desperate behavior of the utilities …”

    You might be interested in this paper Barriers to effective climate change mitigation: the case of senior government and business decision makers

    http://sustainable.unimelb.edu.au/files/mssi/Barriers_to_effective_climate_change_mitigation_Rickards-et-al.pdf

  32. Greg vP
    September 22nd, 2014 at 13:12 | #32

    The “Better Growth Better Climate” report cited in the main post is an extreme example of the quantities of handwavium that get thrown around. I have not yet gone past the summary, but I don’t think I need to. Three of the ten points in its ten-point action plan are “create … a strong, lasting and equitable international climate agreement”, “phase out subsidies …”, and “scale up innovation”.

    Following Paul Krugman’s idea of the “confidence fairy”, we can call these “the world peace fairy”, “the voluntary sacrifice fairy”, and “the technology fairy” respectively. The chances of any one of them waving her wand in the next 35 years is small. The chance that all three do? Vanishingly small. The report is pharmaceutical-grade handwavium.

  33. Fran Barlow
    September 22nd, 2014 at 13:21 | #33

    @John Goss

    I agree that denialists are denialists mostly because they are right wing. But this brings up the question as to why the right wing ruling class are climate change denialists. Surely they are interested in the survival of human civilisation on the planet too.

    Why would they be? At an existential level, many of them like the idea that people would admire their works after they are gone, but you don’t need much of civilisation to survive to believe in that. If there were catastrophic reversals in human life chances and only the heirs of the richest billion were alive in 120 years why would today’s richest 0.1% care about that?

    And even if they did, how does that compare as an ‘aphrodisiac’ with power over others today? Not very well I’d say.

    These folk have cut their teeth on compartmentalising, defending their privilege and rationalising their acts as legitimate no matter how repulsively misanthropic they are.

    How is climate change denialism in their interest if they end up with short term profits but at the expense of a dying civilisation and economy? Let me put forward some possible explanations.

    This is the closest of your options here:

    2. They have the money to adapt to the negative impacts of climate change, and anyway there will be less impact of climate change on the rich, especially in the next 30 years

    This too is important:

    5. The right wing climate denialists are concentrated in those countries ie Canada, Australia and USA which have more fossil fuel interest than others, and therefore more to lose by the move to renewable energy.

    The structure of capitalism is ill-equipped to deal with cycles of benefit much over about five years. At ten years projections of ROI and asset values are at best nebulous. A corporate executive acting in the interests of shareholders is not going to be answerable in practice for the condition of the business in 2040 or even 2025 because by then he or she will either be in some other business or retired and living in comfort with a truckload of assets. Within 25 years, the vast majority will be dead or retired. And 2100? As if they would care. They are latently, if not expressly misanthropic. It’s an artefact of being a serious beneficiary of deeply unequal relations of power.

    In order to care about the well-being of humanity in a broader sense, you need to draw your identity from your place in history and regard the significance of humanity as a phenomenon as greater than the significance of any individual within it. Rightwingers in general, and privileged rightwingers in particular ate never going to grasp that.

  34. calyptorhynchus
    September 22nd, 2014 at 14:22 | #34
  35. calyptorhynchus
    September 22nd, 2014 at 14:23 | #35

    Somehow my link went whamy, just click on the second paragraph to follow it.

  36. Donald Oats
    September 22nd, 2014 at 16:00 | #36

    The Abbott guvm’nt might rip up the RET and thereby (temporarily) trash our renewable energy industry, or they just might leave it alone, but let the frothing of speculation do the damage instead. In the long run though, the Abbott guvmn’t are powerless to prevent Australia from adopting renewable energy technologies, for large economies in the western world are on precisely that trajectory. The solar panel technologies and products have followed that classic path of adoption so far. With the prospect of bending panels, and even fully flexing panels, there is much more innovation ahead. There are also some good ideas on how to make even more inroads on the efficiency of panels.

    If coal-fired power hangs around, it is because we are subsidising them in various ways. But for the Abbott guvm’nt, which is happy enough to put the sword to the car manufacturing industry, to kill off naval manufacturing (in SA) and manufacturing more generally, happy enough to plunge the blade deep into the gizzards of the scientificky stuff which couldn’t possibly be true in a theo-neo-con’s universe, I have no crystal ball on what they’ll do with respect to the RET. The fact that renewables like wind and energy involve invisible powers should be right up this Abbott guvm’nt’s alley you would think…

  37. John Quiggin
    September 22nd, 2014 at 16:00 | #37

    @Ikonoclast

    A post on this coming Real Soon Now

  38. derrida derider
    September 22nd, 2014 at 16:56 | #38

    @faustusnotes , “prior” is just shorthand for “prior probability estimate”, which does not carry the same connotations as “biases”. “Bias” tends to become synonymous with John’s “denial” (that is, failing to update priors with a “post” probability estimate when learning new facts).

    We should have priors, but we shouldn’t have biases (though real life humans of course usually have plenty of both).

  39. derrida derider
    September 22nd, 2014 at 17:00 | #39

    Fran, add a simple

    6. The rich are old and won’t be around to see the consequences

    to your list of reasons why our rulers don’t care about AGW. The generational gap in attitudes to these things is really noticeable.

  40. jungney
    September 22nd, 2014 at 17:45 | #40

    The key choke point for decarbonizing the world, one right here in Australia, is the rail transport system taking the coal to export ports. The scheduling of rail is a tight business where fifteen minutes of delay costs an awesome amount of money in rescheduling, penalties, and delayed shipping. There are many ways to disrupt rail without putting lives at risk or destroying property although you would need to know that such disruption imposes severe criminal penalties. If you aren’t thinking about how to engage with that project, by any means including either direct participation or funding people who are capable of doing it, then what the hell do you think you are doing?

  41. Fran Barlow
    September 22nd, 2014 at 18:35 | #41

    @derrida derider

    I also dislike the idea of bias as it implies that

    A) Lack of bias or being above having a paradigm is possible
    B) the truth lies in the middle of two extremes

  42. John Goss
    September 22nd, 2014 at 19:25 | #42

    Its fascinating that Rupert Murdoch (an old man) for a while believed we should act on climate change, apparently because of the urgings of his mother (an old wise woman) and his son James. But now his mother is dead and James is out of favour he has reverted to his former views that its all a greenie Marxist plot. (And of course in his youth he had quite an interest in Marxist views.
    Fascinating how people change).

    I actually don’t think being short-sighted has much to do with age.
    It’s more of a personality thing. Many 30 and 40 year olds only think the short-term is important.

  43. September 22nd, 2014 at 19:42 | #43

    The key choke point for decarbonizing the world, one right here in Australia, is the installation of solar PV on roofs. Coal power is a capital intense business that relies upon both a high enough average wholesale price to make a profit and a steady enough wholesale price to minimize expensive cycling of coal plants. Electricity prices dropping below a coal plant’s operating costs for more than a few minutes costs them an awsome amount of money. Already on some days rooftop solar already provides well over a third of total electricity use in South Australia. Increased penetration of rooftop solar will totally destroy the economics of coal. There are many ways to install point of use solar without putting lives at risk or destroying property and currently does not carry criminal penalties. If you aren’t thinking about how to engage with this project, by any means including either direct participation or funding people who are capable of doing it, then what the hell do you think you are doing?

  44. September 22nd, 2014 at 21:47 | #44

    @Alon Levy

    If $57 per tonne gives you 13.5% reduction now, then as alternative technologies get cheaper, that $57 per tonne will lead to bigger and bigger cuts in emissions.

    As I see it, you make a start, and steadily increase the carbon cost while monitoring emissions. You try and time the increases to get the most bang for your buck.

    It won’t be easy, in the way that anything epic isn’t easy. But it won’t kill us.

  45. rog
    September 23rd, 2014 at 03:05 | #45

    I would think that one disincentive to moving to a zero carbon energy system is that the owners of capital need to have return on the/their capital already invested in carbon intensive systems. These owners may be individuals, companies, govts and pension funds – in fact just about everybody could take a hit to their back pocket.

  46. jungney
    September 23rd, 2014 at 07:53 | #46

    @Ronald Brak
    Your faith in a militant display of green consumption and the market as a base for activism is touching. However, it won’t matter how much solar pv Australia puts up if we keep exporting coal.

  47. Nevil Kingston-Brown
    September 23rd, 2014 at 09:43 | #47

    On the same theme as Ikonoclast:
    Left-wing derp tends to take the form: we can only overcome X if we overthrow the structures of capitalism, where X has been variously racism, patriarchy, nuclear war, and so on. I’ve been as guilty of this underestimation of the flexibility of capitalism as anyone. I’m not denying that there is still racism/patriarchy/risk of nuclear war, but these days you can find as many or more capitalists opposing as upholding these things and the arguments that capitalism depends on dividing & conquering workers on racial grounds/underpaid female labour/permanent war economies seem to have collapsed. These all happen, but they don’t seem essential to the functioning of the system.
    The question now is, is there something about the exploitation of the environment in general, and externalising greenhouse gas pollution in particular, that is either essential to capitalism in general, or essential to the particular power structure of the moment. Certainly current power structures and fossil fuel interests seem to be tightly intertwined in the Anglosphere and Russia. But it seems more likely that countervailing interests (e.g. the insurance industry, agriculture, coastal cities) will eventually prevail within a capitalist system than that the system overall will fall as Naomi Klein et al suggest.

  48. Fran Barlow
    September 23rd, 2014 at 11:14 | #48

    @Nevil Kingston-Brown

    Left-wing derp tends to take the form: we can only overcome X if we overthrow the structures of capitalism, where X has been variously racism, patriarchy, nuclear war, and so on.

    Hmmm One does hear this sort of thing, but one hears a great many things. Some of the radical feminists asserted that it was men rather than capitalism that were the problem, for example. Asserting that capitalism entailed nuclear war was just silly. Asserting that capitalism must lead to war in general was far more sound.

    The sound claim is that insofar as capitalism trades on all manner of division, the surest path to overcoming the major faultlines within the system is to author a system that is based on inclusion rather than unwarranted privilege.

    I’ve been as guilty of this underestimation of the flexibility of capitalism as anyone. I’m not denying that there is still racism/patriarchy/risk of nuclear war, but these days you can find as many or more capitalists opposing as upholding these things and the arguments that capitalism depends on dividing & conquering workers on racial grounds/underpaid female labour/permanent war economies seem to have collapsed. These all happen, but they don’t seem essential to the functioning of the system.

    They aren’t ‘essential’ to the system but they strongly predispose the preservation of unwarranted privilege and in any zero sum game, which is how capitalism functions in periods of low growth or worse, pitting the poor against each other is a tried and true method. Not all capitalists or their PR agents will agree of course, but the system’s mechanisms operate beyond and beside actual capitalists.

    I note that Tim ‘Freedom’ Wilson is these days supporting the trade of freedom for security, a move which is entirely predictable, given the need for austerity and redivision of wealth the dominant fraction of the boss class in this country. Nothing, and certainly not freedom, is sacrosanct when the privileges of the boss class are being considered.

  49. September 23rd, 2014 at 11:24 | #49

    @jungney
    Jungney, I thought I’d better offer you an option that won’t (at the moment) result in jail time. After all, it’s not as if these new anti-terrorism laws will be used against terrorists. That would be silly! No, more likely they will be used against protestors who lie down on train tracks. That could be classed as terrorism. After all, that could totally terrify the programming in the self driving train hauling the coal. And when you think about it, the more resources Australia has, the more of a tempting target it is for invasion. So interferring with the export of these dangerus to possess rescources would therefore be endangering Australia’s security and so would be treason. I think they can still kill you for treason. (Technically they can’t, but I perhaps if they say the word terroism enough technicalities will dissappear.) I know you specifically mentioned not causing property damage or harming people, but when you think about it, that’s the worst kind of terrorism of all. I mean, just look at all the damage Ghandi and his followers did to the butts of British rifles. Clearly, brutalising Australia’s police and legal system by forcing them to detain principled protestors for 14 days without charge and then use beat up, senseless anti-terrorism laws to sentence you is the worst form of terrorism of all.

  50. Nevil Kingston-Brown
    September 23rd, 2014 at 11:53 | #50

    @Fran Barlow
    Just clarifying, I wasn’t asserting that capitalism inevitably led to Nuclear War, I was referencing the Baran/Sweezy argument that the US’ Cold War economy only staved off capitalist crisis by maintaining a permanent war economy. (Also, radical feminist derp is not identical to left-wing derp).

    Freedom Boy has abandoned the cause? Say it ain’t so!

  51. jungney
    September 23rd, 2014 at 18:24 | #51

    @Ronald Brak
    Thanks for that:) I was aware of the likelihood of being accused of promoting terrorism when I advocated peaceful, non-violent direct action to disrupt coal shipments. There’s an idiot National somewhere down south of NSW who has already labelled animal rights activists as ‘eco-terrorists’ for filming abattoir conditions and cage chicken factories. I think we might need to test the boundaries of these new laws and it is always best to confront bullies (Abbott and the mad dogs) sooner than later but as yet I’ve not heard from the Feds! In the US, the FBI ranks the Animal Lib Front (ALF) as it’s top internal terrorist threat. Admittedly, they have a significant history of arson but I’m pretty sure that they’ve never harmed a person.

  52. Paul Norton
    October 5th, 2014 at 09:29 | #52

    Unfortunately, there are also many who, like Trainer, regard themselves as being on the environmental side of the debate but give aid and comfort to its enemies by backing their bogus claims of economic armageddon. At these point, it is necessary to extend the denialist label to cover this group as well.

    The difference being that this group wants economic armageddon and deeply disapproves of any prescription for an ecologically sustainable society that isn’t austere, detechnologised, deurbanised, etc.

  53. John Quiggin
    October 5th, 2014 at 09:55 | #53

    @Paul Norton
    Exactly right, as I;ve been pointing out for a long time

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