Archive for December, 2014

Catalyst teaches the controversy

December 31st, 2014 59 comments

I was at the gym just now and they had a rerun of a Catalyst story from October on the alleged climate change pause, presented by Anja Taylor. It was appalling. It started off correctly attributing the 1998 peak in warming to El Nino (with a shot of Richard Morecroft).

Next there was an unnamed speaker, suggesting that this presaged a permanent El Nino . This obvious straw man (it’s called the Southern Oscillation because it’s cyclical) was presented as if it represented the view of mainstream science, but the transcript attributes it to “reporter”. Clearly, Taylor was unable to get any vision of an actual scientist making this claim.

Next, four denialists (Monckton, Paltridge, Newman and Curry) and an editorial intervention from Taylor asserting the “pause” as a reality, with some super-shoddy graphs. Then a flashback to Climategate.

After this setup, things got gradually better. Some real scientists were brought on, and we eventually reached the conclusion “All things considered, there’s been no global warming pause”. But anyone watching the program would conclude that the sceptics had a pretty strong case.

The problem is that this kind of “teach the controversy” approach is utterly inappropriate for a TV science program. In this case, the problem is (as the program admits) that the majority of the time is given to a view held by a tiny minority of scientists, so few that Taylor had to give air time to two non-scientists and one who has gone emeritus. But even on a topic where scientists are actually divided, a 15-minute TV segment isn’t going to help clarify the issues.

Unfortunately, this kind of thing is typical of Catalyst nowadays. I used to think it was just Maryanne Demasi, but obviously the producers want to present “he said, she said” controversy. It’s time for the ABC to pull the plug.

Categories: Boneheaded stupidity, Science Tags:

Consequentialist arguments for deontological positions

December 31st, 2014 50 comments

Thinking about various interchanges on the Internetz, a great many have the frustrating property that, while they appear to be couched in consequentialist terms, some or all of the participants are defending claims that they actually hold for deontological reasons[^1]. For example, a follower of Pythagoras (who, apocryphally, forbade the eating of beans) might appear in a discussion about beans and claim that we shouldn’t eat beans because
* they cause flatulence
* bean production is environmentally destructive
* the bean industry is dominated by exploitative multinationals
The problem for someone seeking to counter these arguments is that, even if they are all refuted, the Pythagorean will not agree that it is OK to eat beans.
Read more…

Categories: Metablogging, Philosophy Tags:

Sandy Hook and Peshawar

December 23rd, 2014 89 comments

A couple of news items that struck me recently

* Two years after the Sandy Hook massacre, a US Federal Appeals Court has ruled that people with a history of mental illness have a constitutional right to gun ownership.

* In the immediate aftermath of the Peshawar massacre, a Pakistani judge granted bail to the alleged planner of the Mumbai massacre, Zaki ur Rehman Lakhvi, a leading figure in the (military-backed) Lashkar e-Taibi terrorist group.

Obviously, these decisions were neither aberrational nor the product of a legal system divorced from any social context. Rather, they reflect deeply ingrained views in the societies from which they emerged. Beyond that point, I don’t have a lot to say, but I’ll be interested to read the views of others.

Categories: Economics - General Tags:

From Montreal to Lima

December 21st, 2014 10 comments
Categories: Environment Tags:

The fossil fuel crash of 2014

December 20th, 2014 43 comments

Among the unforeseen (by me, at any rate) events of 2014, the collapse in the price of crude oil may be among the most significant. Prices have fallen from more than $100/barrel in mid-2014 to around $60/barrel today. This follows a more gradual fall in the price of coal. The thermal coal price peaked at $140/tonne in 2011 and has now fallen to around $70/tonne. Prices for metallurgical coal and iron ore have also collapsed.

What should we make of this? The big questions are
(i) to what extent does the price collapse reflect weak demand and to what extent growing supply
(ii) will these low prices be sustained, and if so, what will be the outcome.

The answer to the first question seems to be, a mixture of the two, with some complicated lags. Strong demand growth (briefly interrupted by the GFC) produced high prices which made new projects appear profitable. Now the projects are coming on stream, but demand has weakened. Since both demand and supply are inelastic (not very responsive to prices) in the short run, a moderate oversupply produces a big drop in prices.

Coming to the second point, if we are to reduce emissions of CO2, a necessary precondition is that the price of fossil fuels should fall to the point where it is uneconomic to extract them. Current prices are below the level at which most new oil and coal projects are profitable, so, if they are sustained, we can expected to see a lot of project cancellations and closures (this is already happening with coal to some extent).

The big question is whether sustained low prices will lead to a recovery in demand. There are at least some reasons to hope that it won’t. There’s pressure to reduce coal and oil use coming from many directions, so, even at lower prices, I doubt that we will see a surge in investment in new coal-fired power plants* or a return to oil for uses like heating.

So, the hopeful scenario is one in which the abandonment of new projects brings us the long-awaited advent of Peak (or rather Plateau) Oil and Coal** in the not-too-distant future, giving time for policy to push the global economy in the direction of decarbonization.

* Someone will doubtless point to the case of Germany. But as far as I can tell, the plants that have opened recently were commissioned around 2006, and most proposals made since then have been abandoned.

** Of course, gas is a different story, partly because there is no global market. Gas prices are rising in some places (Australia, for example) and falling in others as trade expands.

Categories: Economics - General, Environment Tags:

MMT and Russia

December 18th, 2014 196 comments

Whenever I post anything about taxation and public expenditure, it’s a good bet that someone will pop up in the comments section to claim that, according to Modern Monetary Theory, states that issue their own currency don’t need taxation to finance public expenditure. That’s a misunderstanding of the theory, but it’s proved hard to explain this. The current crisis in Russia provides a teachable moment.
Read more…

Categories: Economics - General Tags:

Tell ’em they’re dreaming

December 15th, 2014 181 comments

The title of a piece in Inside Story on nuclear power in Australia. Readers won’t be surprised to learn that I don’t think it’s feasible in any relevant time frame (say, before 2040). I don’t expect nuclear devotees to be convinced by this (I can’t think of any evidence that would have this effect), but I’d be interested to see someone lay out a plausible timetable to get nuclear built here sooner than my suggested date.

To clarify this, feel free to assume a conversion of both major parties and the majority of the public to a pro-nuclear position, but not to assume away the time needed to generate a legislative and regulatory framework, take proper account of concerns about siting, licensing and so on.

Categories: Economics - General Tags:

Greenpeace and vandalism

December 14th, 2014 70 comments

In the light of the appalling vandalism undertaken by Greenpeace at Nazca in Peru, I thought I would repost this piece from 2011, published as Greenpeace, an enemy of science. I note that, as in the previous instance, those involved did not turn themselves in. In this case, they have apparently fled the country.

Greenpeace, an enemy of science

Tim Lambert comments on Greenpeace sabotage of a CSIRO experiment on GM crops. Sadly, Greenpeace has become an openly anti-science organisation.

I agree with everything Tim says, but I’d add something more on the politics of this action. This kind of criminal vandalism, in the “right” cause, appeals to the juvenile instincts that nearly all of us retain to some extent, but it has repeatedly proved disastrous for the left, and the environmental movement. It’s worth comparing this kind of action to civil disobedience protests, where people put themselves on the line and openly invite arrest. If these guys had any desire to promote genuine debate they would turn themselves in and defend their actions in open court.

Given the embrace of anti-science and anti-rational views by the political right, it is important that the left and the environmental movement should dissociate themselves entirely from this kind of action. It will be a long time before Greenpeace can regain my support, if they ever do.

Categories: Boneheaded stupidity, Environment Tags:

The Google Tax

December 11th, 2014 71 comments

The announcement by the Conservative UK government of a tax on diverted profits (popularly referred to as the “Google Tax”), along with reports that the Abbott government may follow suit, has received only limited attention (as far as I have seen) but seems like a very big deal. A few observations on this

* It’s notable that these are conservative, business friendly governments that are, like all governments, short of money. It appears that, thanks to the steady drip feed of revelations about the “Double Irish”, Luxembourg private rulings and so on, that, even for such governments, highly profitable multinationals have become an appealing target, at least relative to domestic taxpayers

* If successful, this tax will turn two of the standard presumptions of the corporate tax debate on their heads. First, that corporate tax minimisation is not only legitimate but part of the obligation of managers (the corresponding shift was made with respect to individuals, in Australia at least) decades ago. Second, and more important, that global corporations can choose where they pay tax. The point of the UK tax is that, once corporations are found to be engaged in tax avoidance (pretty much a slam dunk), they can be made to pay in any jurisdiction, at rates that jurisdiction considers appropriate.

* It’s hard to see how corporations like Apple and Google can dodge this. They could refuse to supply their goods and services to the UK, but that would be immensely costly, and would be likely to provoke retaliation from other EU members.

* This will make a big change to the OECD processes aimed at a co-ordinated response to base erosion and profit shifting. Until now, corporations have had a strong interest in slowing this process down, and shopping around for good deals from the likes of Ireland, Luxembourg and, of course, Delaware. Now that they face the risk of facing unco-ordinated punitive action applied in many different countries, enlightened self-interest would suggest that they should support a global deal.

* In combination with the GFC, which revealed the extent to which “global” banks actually depended on protection from their home national governments, limits on global tax evasion undermine much of the analysis of globalisation that was dominant in the late 20th century

* If capital income can be taxed effectively in the countries where profits are generated, there’s much less need for ideas like Piketty’s global wealth tax.

Categories: Economic policy Tags:

The socialisation of economists (crosspost from Crooked Timber)

December 10th, 2014 74 comments

I’m following up Henry Farrell’s post on the superiority or otherwise of economists, and Krugman’s piece, also bouncing off Fourcade et al, with a few observations of my own, that don’t amount to anything systematic. My perspective is a bit unusual, at least for the profession as it exists today. I didn’t go to graduate school, and I started out in an Australian civil service job in the low-status[^1] field of agricultural economics.

So, I have long experience as an outsider to the US-dominated global profession. But, largely due to one big piece of good luck early on (as well as the obligatory hard work and general ability), I’ve done pretty well and am now, in most respects, an insider, at least in the Australian context.
Read more…

Categories: Economics - General Tags:

Monday Message Board

December 8th, 2014 67 comments

It’s time for another Monday Message Board. Post comments on any topic. Civil discussion and no coarse language please. Side discussions and idees fixes to the sandpits, please.

Categories: Regular Features Tags:

Weekend reflections

December 6th, 2014 34 comments

After a long break,it’s time for another weekend reflections, which makes space for longer than usual comments on any topic. Side discussions to sandpits, please.

Categories: Regular Features Tags:

Broken promises and budget anger …

December 4th, 2014 108 comments

this chaotic mess won’t be fixed with the usual political script

That’s the headline for my latest piece in The Guardian. It’s over the fold

Read more…

Categories: Oz Politics Tags:

Truth in Labelling: Universities Australia edition

December 3rd, 2014 25 comments

A while ago, I suggested that bodies like Universities Australia should dissolve themselves and make way for a body that actually represents universities as communities of scholars (students and academics) and the workers (professional and administrative) who support them. I see I’ve been joined by Stephen Parker from the University of Canberra who describes UA support for deregulation as a “suicide ritual”. Meanwhile, Pyne is quoting the support of UA and its elite subset the Go8 as evidence of “consensus” in favor of his reform, treating the support of 30-odd individuals as more important than the overwhelming opposition of hundreds of thousands of students and staff.

Since these organizations appear determined to drag out their useless existence, can I at least ask for some honesty in labelling. How about

University Senior Management Australia and
Group of Eight University Senior Managers Who Are Better Than All The Others.

Seriously, it’s obvious that, while students, academics, other staff and senior managers have some common interests, they also have lots of conflicting interests. That’s true of universities, just as its true of the workers, bosses and customers of any industry in the private sector. The idea that a policy supported by top managers must be good for universities as a whole is on a par with the old claim that “what’s good for General Motors is good for American”

Categories: Economic policy Tags:

Deficit fetishism

December 1st, 2014 39 comments

As the Mid-Year Economic and Fiscal Outlook approaches, talk about the budget deficit is approaching panic. This piece from Deloitte, warning that “the budget is burning” is typical. It predicts a 2014-15 budget deficit of $34.7 billion, and future deficits “as far as the eye can see”.

Billion dollar numbers are big and scary, but some perspective is useful. Australia’s GDP is currently $1.6 trillion dollars per year, so the massive deficit is about 2 per cent of GDP. On Deloitte’s current “disastrous” predictions, the deficit should be below 1 per cent of GDP by 2017-18.

But wait, there’s more. Australian government debt is currently about 20 per cent of GDP. It has been around this ratio, varying with the business cycle, for many years. Since GDP grows at around 5 per cent a year in nominal terms, the debt/GDP ratio stays unchanged if debt also grows by 5 per cent, that is, if deficits are equal to 1 per cent of GDP (that is, 5 per cent of 20 per cent).

Simply put, the budget is so close to balance that it doesn’t matter. In the absence of the terms of trade shock from coal and iron ore, it would have made good sense to aim for a surplus. As it is, the sensible short-term macro strategy is to take a modest hit to the deficit and cushion the economy from contraction, a point that has been made by the OECD.

As always, there are long term problems that need to be addressed. But absurd panics about whether a (necessarily arbitrary) budget measure is a little above or a little below zero don’t help.

Categories: Economic policy Tags:

The strengthening economic case for fossil fuel divestment

December 1st, 2014 23 comments

That’s the title of my latest piece in The Conversation. The bottom line

Leaving aside the ethics of divestment and pursuing a purely rational economic analysis, the cold hard numbers of putting money into fossil fuels don’t look good.

Unless universities are willing to bet on the destruction of the planet they have committed themselves to understanding and preserving, divestment from fossil fuels is the only choice they can make. Forward-thinking investors of all kinds would be wise to follow suit.

Categories: Economics - General, Environment Tags:


December 1st, 2014 7 comments

A new sandpit for long side discussions, idees fixes and so on.

Categories: Regular Features Tags:

Monday Message Board

December 1st, 2014 20 comments

It’s time for another Monday Message Board. Post comments on any topic. Civil discussion and no coarse language please. Side discussions and idees fixes to the sandpits, please.

Categories: Regular Features Tags: