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The awkward squad

April 13th, 2016

Looking back, the G20 meeting in Brisbane marked a historic turning point in global climate policy. Before G20, the big problem had been the unwillingness of any of the big emitters (US, China and India) to make the first move. The joint statement by Obama and Xi Jinping broke the logjam, with the result that India moved away from its longstanding position that poor countries should have the opportunity to repeat the mistakes of the past before dealing with the problems of the future. This shift was reflected in the successful outcome in Paris, and with the arrival of Peak Coal in both the US and China. India is still expanding its use of coal, but renewables are growing much faster, and imports are already declining.

With all the big players on board, the immediate problem in climate change policy is what might be called the awkward squad – a group of second- and third-rank countries that are, for one reason or another, trying to push ahead with fossil fuels. These include Poland, Saudi Arabia, Turkey, Vietnam and, of course, Australia. Until the recent election, the Harper government in Canada was part of the awkward squad and a comfortable ally for Abbott and the LNP denialists. But Harper’s defeat appears to have provoked a broader rethinking with even the Conservatives moving to a pro-planet position.

As the awkward squad shrinks (Vietnam is already showing signs of rethinking) the remaining members are going to find their position in the international community less and less comfortable. That is, of course, unless the Republicans win the US Presidential election. In that case, the whole world will have a lot to worry about.

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  1. James Wimberley
    April 13th, 2016 at 17:31 | #1

    There’s a group of countries and substate jurisdictions that are not so much trying to expand the use of fossil fuels as slow down the pace of their replacement by renewables. The list includes Spain, the UK, Germany and several US states like Nevada. The advertised reason is to cut “unaffordable” (in fact now negligible) renewable subsidies, but the real one is to protect the assets of fossil fuel generators from rapid stranding. This is emerging as the biggest policy and political headache in the transition.

  2. Ikonoclast
    April 13th, 2016 at 17:55 | #2

    At least 2 C warming is now almost inevitable.

    https://www.newscientist.com/article/dn28430-the-climate-fact-no-one-will-admit-2-c-warming-is-inevitable/

    Some think 3 C or 4 C by 2100.

    Personally, I think this will all spiral out of control. We will know by 2030 that we are in deep, deep trouble, IMO.

  3. John Chapman
    April 13th, 2016 at 20:07 | #3

    Mr Quiggin. Could you kindly not refer to “the Republicans win the US Presidential election”.

    There’s a good chap 🙂

  4. Ivor
  5. Ivor
    April 13th, 2016 at 22:16 | #5

    Of course our “renewable energy” capitalists are laughing all the way to the bank.

    Here is one – with $20mill of their own money they then get another $40 mill made up of taxpayer grants and more debt.

    Latest renewable saviour

    And the best they can hope for is 50% renewable generation of electricity supply by 2030 (according to Ernst and Young).

    There is now no possibility, and in fact no policy, for achieving below 40 GT CO2 pa by 2030.

    With 8 billion people this is 5 tonnes CO2 per capita or around 1.4 per person per year – Max.

    So how do you run a competitive capitalist system such that the global average carbon foot print p.a. is below 1.4 tonnes (C)?

    You can try this on any carbon footprint calculator.

    The world will become uninhabitable if 8 billion people emit on average 1.4 tonnes (carbon) or 5 tonnes CO2.

    End of story.

  6. Ivor
    April 13th, 2016 at 22:33 | #6

    Here is another simple awkward fact.

    The average CO2 footprint in industrialised nation is 11 tonnes.

    The average worldwide footprint is 4 tonnes

    To combat climate change it must become 2 tonnes.

    See: Basic benchmarks

    So what exactly was the Paris benefit in moving the world’s population to a global average of around 2 tonnes CO2e?

  7. Ikonoclast
    April 14th, 2016 at 08:31 | #7

    Keep an eye on Greenland’s melt data this northern summer.

    http://www.climatechangenews.com/2016/04/12/greenland-sees-record-smashing-early-ice-sheet-melt/

    The signs seem to be that we are entering a period of rapid warming and rapid sea level rise from… now.

  8. John Chapman
    April 14th, 2016 at 09:26 | #8

    Margaret Davidson, NOAA’s senior advisor for coastal inundation and resilience science and services, and Michael Angelina, executive director of the Academy of Risk Management and Insurance, offered their take on climate change data in a conference session titled “Environmental Intelligence: Quantifying the Risks of Climate Change.”

    RIMS16_conference logoDavidson said recent data that has been collected but has yet to be made official indicates sea levels could rise by roughly 3 meters or 9 feet by 2050-2060, far higher and quicker than current projections. Until now most projections have warned of seal level rise of up to 4 feet by 2100.

    http://www.insurancejournal.com/news/national/2016/04/12/405089.htm

  9. John Chapman
    April 14th, 2016 at 09:27 | #9

    Davidson said recent data that has been collected but has yet to be made official indicates sea levels could rise by roughly 3 meters or 9 feet by 2050-2060, far higher and quicker than current projections.

  10. April 14th, 2016 at 10:38 | #10

    An interesting thing is that while the Coal-ition government definitely wants other countries to buy Australian coal, Australia itself will never build another coal power station. Despite this being where the coal they wish to export comes from. In fact, Western Australia now looks set to close the Muja A and B units which represent Australia’s newest additions to coal capacity due to a major refurbishment and upgrade they received just a few years ago. South Australia’s sub-bitumenous coal Northern Power Station is about to close because, despite running off lost cost stranded coal, it is simply not profitable to operate in a grid with a moderate 40+% penetration of wind and solar. One of its two units appears to be shut down for good already and the remaining one will permanently close once its storage bunkers are empty of coal since South Australia’s only coal mine has already closed.

    Note that it is not profitable to ship coal from Australia to Australia. That is, it doesn’t make economic sense to ship New South Wales or Queensland coal to South or Western Australia.

    So while Australia’s coal consumption and CO2 emissions increased with the removal of the carbon price, coal use is only going to decrease from here on. And with Australia having now economic incentive to import coal to itself and the cost of renewables increasing all the time, it is clear that coal exports are not going to recover.

  11. Tim Macknay
    April 14th, 2016 at 11:11 | #11

    @Ronald Brak
    Also worth noting is that the two coal mines that service the Muja A and B power stations in Western Australia are not, themselves, profitable.

  12. April 14th, 2016 at 11:37 | #12

    Yep. Western Australian coal is heavily subsidized. They have actually considered importing coal from Indonesia as a cheaper option, but it is not cheaper than renewables.

  13. John Quiggin
    April 14th, 2016 at 11:53 | #13

    @Ikonoclast

    If you actually read the article, it shows that warming of more than 2 degrees is inevitable if

    (i) contrary to the Paris agreements (made after the article was written), there is no further tightening of policy targets
    (ii) emissions remain at or above current levels until 2030, when it seems likely they have already peaked (again, this became clearer after the article was written)

    I know you’re determined to be an Eeyore, but you should read things more critically, particularly when they confirm your prejudices.

  14. Tim Macknay
    April 14th, 2016 at 13:18 | #14

    @Ronald Brak

    They have actually considered importing coal from Indonesia as a cheaper option, but it is not cheaper than renewables.

    When the news of that came to light, I briefly considered whether armed insurrection might be the only way forward. 😉 Fortunately, the forces of reality are gradually overwhelming the coal boosters’ resistance.

  15. MWS
    April 14th, 2016 at 14:30 | #15

    @Ronald Brak
    Muja A and B were the oldest power stations using Collie coal. They had been closed in 2007, but a decision was made to upgrade them after the 2008 Apache gas explosion (which demonstrated the reliance on one gas pipeline for WA’s electricity generation). The upgrade went massively over-budget (eventually $250 million). The reason why they were mothballed in the first place was because the cost of repair was too high! The original estimate of the time necessary was “four to six weeks” (Wikipedia), instead of more than 4 years.

    The decision to re-commission the plants was stupid, but after the 2008 State election, the decision of the new Government to continue to pour taxpayers’ money into the upgrade was complete lunacy! Especially as PV power now provides more than one power station’s output to the electricity grid.

    Oh – we are still waiting for the investigation promised by the Premier in 2013. Although it’s probably gone the same way as Barnett’s other promises …

  16. Ivor
    April 14th, 2016 at 15:54 | #16

    @John Quiggin

    Yes precisely;

    warming of more than 2 degrees is inevitable if

    (i) contrary to the Paris agreements (made after the article was written), there is no further tightening of policy targets

    This is how matters are unfolding.

    And it is true that:

    warming of more than 2 degrees is inevitable if

    (ii) emissions remain at or above current levels until 2030, when it seems likely they have already peaked (again, this became clearer after the article was written)

    particularly if this so-called peak is merely an artefact of a blip in Chinese economy, does not impact significantly on the long run trend, and has no effect on the Keeling Curve.

  17. John Quiggin
    April 14th, 2016 at 16:01 | #17

    @Ivor

    You go to your planet and I’ll go to mine.

  18. April 14th, 2016 at 16:02 | #18

    Yes, MWS, that certainly seems to be business as usual. Incumbents insist that, “the lights will go out” and the voters will turn against whoever is in power if that happens unless tens of millions are spent on fossil fuels which becomes hundreds of millions. And politicians, being both creatures of the moment and friends and future highly paid employees of the people in suits telling them millions need to be spent on fossil fuels, cave in a variety of creative ways.

    Western Australia is just the most extreme example.

  19. Ivor
    April 14th, 2016 at 17:38 | #19

    John Quiggin :
    @Ivor
    You go to your planet and I’ll go to mine.

    Mine will be cooler.

  20. 2 tanners
    April 14th, 2016 at 18:38 | #20

    I see Peabody has filed for Chapter 11 in the US. It’s not going bankrupt in Australia “because that would cost it more”. Draws together a few threads on the unreality of finance and the unconomic nature of coal in one neat little package.

  21. Collin Street
    April 14th, 2016 at 18:55 | #21

    > You go to your planet and I’ll go to mine.

    If everyone who thought differently had their own planet we wouldn’t be in this pickle.

    [me? I tend to agree more with JQ on the social dynamics side, but, well, previously my plan for acquiring waterside property was to save up and buy it later, but a new option seems to be opening.]

  22. BilB
    April 14th, 2016 at 19:25 | #22

    That CO2e calculator is a great piece of software, Ivor. My family came in at under 3 tonnes and if the Hyundi Ioniq

    http://insideevs.com/hyundai-estimates-electric-range-for-ioniq-phev-at-32-miles-ioniq-bev-at-155-miles/

    …arrives on queue I will be buying 2 (staggered purchase) and with a few other tech improvements my family emissions will be well under 1 tonne per person, including air travel (trips to Melbourne). In that there will be no compromises in living comfort.

    What is missing out of that is the COe content of the things we buy (food, toys, hardware, etc). I will start to look at that, and then I will look at what my business emits per employee. It is all looking quite doable with out great cost.

  23. Ivor
    April 14th, 2016 at 19:52 | #23

    @BilB

    I do not follow – if

    My family came in at under 3 tonnes

    then you are already under 1 tonne per person – unless you misused the word “familY”.

    If you are under 1 tonne CO2e then you are fantastically below 1.4 tonnes Carbon.

    What was the annual electricity and gas consumption values and daily travel arrangements you entered into the calculator?

  24. BilB
    April 14th, 2016 at 21:07 | #24

    Sorry Ivor, 3 tonnes per person, at the present 3 people in the house and allowing for 20,000 klm driving in a not so efficient car.

  25. BilB
    April 14th, 2016 at 21:21 | #25

    I see a return flight to London is 2.73 tonnes CO2e, that is the only thing that will cramp my style and push my emissions up.

  26. John Goss
    April 14th, 2016 at 23:30 | #26

    I suppose wearing a tin foil hat won’t protect Ivor from the aliens if he already is one.

  27. Ivor
    April 14th, 2016 at 23:55 | #27

    @John Goss

    I suppose John Goss needs to go easy on the drugs from now on or get a better nurse if he already has one.

  28. James Wimberley
    April 15th, 2016 at 04:17 | #28

    A Republican win in the US Presidential election now looks very unlikely, whether the candidate is Trump, Cruz or White Knight. Just for the fun of it, would this make a big difference to the trajectory of US emissions?

    – The death of coal is now unstoppable. The Supreme Court has underlined this by halting the CPP regulations – and Peabody Coal has still filed for bankruptcy. The GOP President and Congress will do nothing against fracking, but that is a geological Ponzi scheme and it’s not a given that it can be revived from the current drilling slump. Solar and wind generation are now the cheapest option for new electricity supply.
    – The federal tax credit for EVs would presumably end (not certainly, the lobbies in its favour are now large). State incentives, especially in California, would stay. The learning curve in batteries will remain steep. So at worst a hiccup.
    – The third leg in the transition, efficiency, will operate as before: LED lights, computer controls, building design, process improvements.

    The US commitment under the draft Paris Agreement was justly criticised for lack of ambition, since it was designed to peel off utility opposition. By the same token, it is pretty safe as a forecast under hostile policy.

    One nice touch in the Paris Agreement is Article 28. A country that ratifies can only withdraw after three years, with effect after another twelve months. So President Trump or Cruz would formally be bound by it for nearly his entire first term of office. In practice he would try to sabotage it. This is difficult against a world consensus.

  29. Ikonoclast
    April 15th, 2016 at 08:37 | #29

    @John Quiggin

    According to Wikipedia, Eeyore is a pessimistic, gloomy, depressed, anhedonic, old grey stuffed donkey. I’ll take this as a benign dig. It’s a pretty good characterisation of me. 😉

    To continue in like manner, “determination”, in the sense you meant it, is probably not a feature of depression and anhedonia. Whether I am “determined” to be an Eeyore could depend on which nuance of “determined” is used. For example, I am “determined” to have grey hair in the sense that the deterministic forces of human ageing are giving me grey hair. It might be the same with being an Eeyore. In the realm of free will and determination, we could ponder how much agency each of us has to be other than we are. I certainly ponder how much agency we have when we are locked into our current systems.

    I take a different view of the INDCs. I take the view they are worthless promises. There are hopeful signs but the INDCs are not one of them. The INDCs are quite irrelevant. The hopeful signs are the physically, materially real signs. These are the improvements in and implementation of renewable energy and the decline in coal use, albeit that is scarcely more than a blip down so far. Against the hopeful real signs are other very concerning real signs. The Mauna Loa readings continue to rise. Due to certain feed-backs we have created, drops in human CO2 emissions may now be in the process of being outweighed in climate forcing effect by increases in natural emissions including those of sea floor and tundra methane emissions.

    I regard over-optimism of any sort as more dangerous than pessimistic realism. Over-optimism discounts real dangers. Over-optimism in this context virtually sanctions business as usual: the very set of systems which brought us to this position.

  30. BilB
    April 15th, 2016 at 09:18 | #30

    Ikonoclast,

    Optimism in the presence of dynamic solution engagement and understanding equates to empowerment.

    Else if one does not understand the solutions and actions in progress and cannot or will not quantify their quantifiable impact, then, yes, optimism in others will be seen as foolish.

  31. Ikonoclast
    April 15th, 2016 at 09:35 | #31

    What is replacing thermal coal use? From a quick check, it seems to me that the main replacement so far is natural gas. Solar power and wind power are making some contribution too. Globally, it is doubtful that nuclear power is making a net increase in replacement now. I am not sure of the percentage of replacement each type of power is achieving with regard to replacing thermal coal. Does anyone know these figures?

    Lignite used as thermal coal releases 2.17 Pounds of CO2 per kWh.
    Gas used as a thermal fuel releases 1.22 Pounds of CO2 per kWh.

    That is a very substantial improvement. Is gas currently doing the heavy lifting of replacing thermal coal? Is gas the transition fuel to renewables which fission fuels are not? (See J.Q.’s articles and blogs on the failure of the nuclear “renaissance”.) What is gas supply likely to be going forward? Is peak gas production likely soon? Can renewables out-compete gas now? Soon?

    Anyone got any hard information on this?

  32. Tim Macknay
    April 15th, 2016 at 11:45 | #32

    @Ikonoclast
    It varies depending on the country. In the US, for example, the most of the slack has been taken up by natural gas, with renewables making up only a small proportion of total generation. One of best places to find this kind of info is the International Energy Agency, which publishes country reports and statistics. The most recent country report on the US is here (there are some useful graphs on page 40). On the IEA statistics page there is a good paper entitled ‘Key OECD Electricity Trends 2015’ which has some useful info on changes in the electricty mix and total generation in the OECD (I won’t link to it to avoid automod). The data is generally 2-3 years out of date, which is annoying, but seems to be unavoidable. I think it’s fair to say that gas is now fulfilling the role of a “transitional fuel” that has long been predicted. The proportion of renewables generation is still very low in most jurisdictions, but as it’s the most rapidly growing generation type, it’s reasonable to assume that the share will grow significantly (which is what the IEA predicts, although it has consistently underestimated the actual growth rate of renewables).

  33. John Quiggin
    April 15th, 2016 at 14:26 | #33

    @Tim Macknay

    Two or three years out of date makes a huge difference. The EIA is always out of date and always wrong. Looking at the US, here’s the data for 2015

    https://www.eia.gov/todayinenergy/detail.cfm?id=25492

    Wind made up 41 per cent of new capacity, followed by gas 30 and solar 28. Even allowing for a higher capacity factor for gas (not always the case with peaking plant) it’s pretty clear that renewables are as important as gas in displacing coal.

  34. Ikonoclast
    April 15th, 2016 at 14:29 | #34

    @Tim Macknay

    The latest IEA World Stats I could find go up 2013. Now, if there has been an important inflection point circa 2015 re coal this obviously cannot shown up in the 2013 figures.

    The basic picture from 1973 to 2013 has been an absolute rise in primary energy from all sources from 1973 to 2013. So all of these have contributed more and more energy over that time: coal, oil, natural gas, nuclear, hydro, biofuels / waste and other. There was a total rise from 6,100 Mtoe to 13,541 Mtoe. This is TPES (Total Primary Energy Supply).

    The percentage shifts among the fossil fuels have been;

    1973 – Coal 24.5%, Oil 46.2%, Natural Gas 16% for a fossil total of 86.7%
    2013 – Coal, 28.9% Oil 31.1%, Natural Gas 21.4% for a fossil total 81.4%

    Notes to these figures are;

    1. World includes international aviation and international marine bunkers.
    2. In these graphs, peat and oil shale are aggregated with coal.
    3. Other includes geothermal, solar, wind, heat, etc.

    The above paints an almost Jevons Paradox style picture of us continuing to use more of everything. Has this picture now broken down now and has a real long-term inflection occurred? I don’t know. It seems early days to call it. I wonder, does the Jevons Paradox hold or not hold across commodities / resources where substitution effects can occur? That’s an interesting question which qualified economists might be able to answer for us. I am in doubt about this issue. I have felt for quite some time that we would just keep using more of everything out of the insatiability of the endless growth economy model (and large regional differences in cost and availability). Am I wrong about this? I don’t know.

  35. Tim Macknay
    April 15th, 2016 at 15:17 | #35

    @John Quiggin
    I agree that the 2 or 3 year gap is significant and that IEA forecasts are always wrong, and consistently, and significantly, underestimate the growth of renewable energy. I think the EIA data is useful as a historical indication, though. I also agree that renewables have overtaken gas in importance in terms of new capacity addition, but I also think it’s fair to say, based on the historical data, that the bulk of the coal generation displaced in the US since 2009 has been displaced by gas, although going forward, it will be predominantly renewable energy.

  36. Tim Macknay
    April 15th, 2016 at 15:26 | #36

    @Ikonoclast
    Have you read the article in Nature titled ‘Reaching Peak Emissions’ by Jackson, Canadell, Le Quere et al? it’s the one that generated most of the headlines about an inflection point in global emissions (and my association, fossil fuel consumption). They provide a bunch of sources for their data and the paper is available free online (I’m not linking ‘cos the automod is in a bad mood today).

    IANAE, but I would have thought it was pretty axiomatic that Jevon’s paradox only works where there’s a perfect market and no substitution. I think it also only works where the cost of production of the relevant commodity is sufficiently low that it is still profitable to produce at the lower prices created by the demand suppression resulting from the efficiency improvements. That doesn’t seem to be the case with coal – many mines are closing because the price is too low to make them profitable. Some others (like the ones in Western Australia) are only kept open by subsidies.

  37. Tim Macknay
    April 15th, 2016 at 15:27 | #37

    That should be by association. Argh.

  38. James Wimberley
    April 15th, 2016 at 21:06 | #38

    @Ikonoclast
    The INDCs are far more likely to be over-fulfilled than under. This is most obviously true of China, with falling coal and steel production combined with over 6% GDP growth, but it also looks increasingly likely for India and the USA. Why did 195 countries adopt the text of the Paris Agreement in December and over 230 will sign it on April 22, the first possible day? Because the energy transition is a giant free lunch.

    Where you are right is that the 2 degree target, while it is looking increasingly attainable, is also looking increasingly inadequate. But with the (very significant) exception of large-scale sequestration, the same technologies and economic mechanisms that will get us to the easier target only need tweaking yo get us to the harder one. Bankrupt coal companies don’t have political leverage.

  39. James Wimberley
    April 15th, 2016 at 21:20 | #39

    @Tim Macknay
    Gas can’t possibly explain the fall in coal in China, since they don’t have any. Several other factors are at work: city – based air pollution restrictions, as in Beijing; a rapid tertiarisation of the economy, with falling output of steel and possibly other heavy industrial users; rising efficiency in electricity use, invalidating old scenarios of rapid growth in demand; and the deployment of renewables (hydro as well as wind and solar) by the tens of gigawatts every year. There is no reason to think these forces will stop operating. If you think Xi will back off out of sympathy for unemployed miners, look at the rising numbers of judicial executions in China. The trains will run on time, whatever the human cost.

  40. Ivor
    April 15th, 2016 at 23:14 | #40

    @Tim Macknay

    ‘Reaching Peak Emissions’ by Jackson, Canadell, Le Quere et al appears to be a form of denial facilitated by cherry picking data and vague adjectives such as “substantial” and “dramatically” whatever these can be taken to mean. They give vague references to IMF data and base their argument on associating a possible recent fall in emissions with a couple of years they headline as:

    … global gross domestic product (GDP) grew substantially
    in both years.

    This is false. From 2010, IMF data on World Output has been collapsing. The data from WEO table A1 [HERE] is:

    % change pa.
    2010 5.4
    2011 4.2
    2012 3.5
    2013 3.3
    2014 3.4
    2015 3.1

    Such falls over 6 years represent a degrowth and finally some belated change in CO2 emissions trend would be expected.

    The IMF Output data declines. The CO2 emissions finally respond rather weakly. This is not a decoupling.

    Degrowth is necessary for cuts in CO2 emissions.

    If you look further into the IMF table – it appears that we are seeing nothing but a local minima, couple to a local minima in output, although I do not trust IMF projections in anything.

  41. Tim Macknay
    April 15th, 2016 at 23:31 | #41

    @Ivor
    Ivor, this not the first time I’ve wondered if you’re a Poe. I struggle to believe you have that much trouble reading graphs. You do you read those growth figures as declines? No, you can’t be serious*.

    Also, if you don’t believe anything the IMF produces, why cite it?

    * If you are dyslexic, I sincerely apologise.

  42. Tim Macknay
    April 15th, 2016 at 23:33 | #42

    Sigh. That should be how do you read… I blame Apple corporation…

  43. Ivor
    April 16th, 2016 at 08:53 | #43

    @Tim Macknay

    OK for the children. If figures go from 5.4 to 3.1 – this is a decline.

    Let the denialists squirm – they have nothing to lose but their tears.

  44. Ivor
    April 16th, 2016 at 09:08 | #44

    @Tim Macknay

    Why did you corrupt my statement:

    I do not trust IMF projections in anything.

    into…

    you don’t believe anything the IMF produces,

    .

    Do you even know what projections are?????

  45. Ikonoclast
    April 16th, 2016 at 10:14 | #45

    If I may enter the Ivor / Tim Macknay debate;

    The numbers, short term (2010 – 2015), and long term (1961 – 2013) appear to show a decline trend in the rate of growth. World GDP has still been growing overall but the rate of growth has been declining. Short terms trends like 2010 – 2015 probably mean less than long term trends so let us look at the long term trend.

    https://thenextrecession.files.wordpress.com/2013/01/image001.gif

    As I understand it, the figures for this graph come from the World Bank Global Economic Report 2013. I will stand corrected if someone definitively shows me these numbers are incorrect or not of dependable provenance. If however the numbers are correct they appear to show a long term decline in the rate of growth of the world economy. Of course, the economy is still growing and getting larger but the RATE of growth has been in long term decline since 1961.

    I think we can guesstimate from this graph that from about 1961 to 1971, the World Annual Real GDP Growth was in the average region of 5%. Then from 1973 to 2007 it was in the average region of 3%. The GFC put a huge dent in that and the average including and since the GFC is arguably again about 3% or perhaps even a little less. If the current Chinese slowdown does not slow down the whole world, I will be much surprised.

    The long run data would seem to indicate we are not likely to return to 5% World Annual Real GDP Growth. A new pattern appears to have set in at about 3% average and to have been trend-consistent (flat) since 1973, albeit with the usual peaks and troughs and one usually deep trough, the GFC.

    The question now is this. Is the decline, since the big dead cat bounce of 2010, a short term or a long term decline? Will we go below 3% growth and stay there? Is the world trending to 0% growth for example? Will that become established as the new normal, say in the decade 2021 to 2030? Given current economic problems and growth limit problems (including climate change) besetting the world economy now, I believe that is a distinct possibility. Of course, I might be wrong. I’ve been badly wrong before. I bet J.Q. that the 2020 world economy would be smaller than the 2010 world economy. I am on track to lose that bet badly.

    I am now more cautious. However, there still seems to be considerable evidence that the economy is running up against limits. The limits appear to be both endogenous and exogenous (if I am using these terms correctly in this context.) By endogenous limits I mean limits related to the operations of capital and ownership/management of that capital. By exogenous limits I mean limits related to physical limits and (more importantly) complex environmental system limits.

    Why did the system fail to grow at about 5% after 1971? The environmental limits only seem to be becoming seriously apparent now, circa 2016. However, I won’t speculate on that question here. The serious question now is can we expect growth to remain at about 3% average? Prospects for getting growth back up to the “Golden Era” rate of 5% would seem to be vanishingly small. But is 3% world growth a bad deal? If we could keep it at that and decrease inequality at the same time, this would be a good thing and alleviate a lot of immiseration. That is, if we do not overshoot environmental limits in doing so.

    Lots of questions remain. If the decline in growth rate from 2010 persists and reaches 0% by 2020, we could validly begin asking the question: “Is growth over?” Given the extensive damage to the biosphere by this economic system and the runaway feedbacks now damaging the economy, I think a non-growth future is more likely than a growth one. The current economic system is not meeting the environmental challenges well. Change to prevent environmental damage is always too slow and too late under this system. That is the persistent feature of this system. Feed-backs from this environmental damage are becoming an influential factor in economic performance.

    “Global environmental damage caused by human activity in 2008 represented a monetary value of $ 6.6 trillion, equivalent to 11% of global GDP, calculates a study released today by the UN-backed Principles for Responsible Investment (PRI) and UNEP Finance Initiative.”

    That was 2008. Where are we today?

  46. Ivor
    April 16th, 2016 at 11:36 | #46

    @Ikonoclast

    If the decline in growth rate from 2010 persists and reaches 0% by 2020,

    In fact capitalism has already recorded zero growth, at least in global industrial production (this probably excludes services). It was negative in 2012.

    Alan Kohler demonstrated this on ABC News recently using the following chart:

    ZERO and negative

    So waving some consequential change in CO2 trends, in these circumstances, as some form of decoupling from growth, is false.

  47. Tim Macknay
    April 16th, 2016 at 11:53 | #47

    @Ivor
    Ivor, if you go back to the IMF table you cite, you’ll notice that the figure for 2009 has a minus sign (‘-‘) in front of it. That was a decline – the world economy shrank that year. All the figures you cite from 2010 to 2015 do not have minus signs in front of them. That’s because the world economy grew during those years. This is exactly the same mistake you made last time. No, you can’t be serious. You must be a Poe.

    On my remark about IMF ‘products’ – that was a throwaway line that I wrote in a hurry and I acknowledge that you said you didn’t trust IMF projects, not that you didn’t trust their data. I wasn’t concentrating as I was slightly flabbergasted by your incomprehension of the growth figures. But I accept I was wrong on that, if it makes you feel better.

  48. Tim Macknay
    April 16th, 2016 at 11:53 | #48

    When I said IMF projects I meant IMF projections. I have to learn to stop typing in a iPad.

  49. Ivor
    April 16th, 2016 at 12:02 | #49

    @Tim Macknay

    You are playing a very childish, pointless semantic game.

    If interest rates go from 17% to 5% – this is a decline in interest paid and a decline in interest rates. They do not have to go negative.

    A decline in growth is obvious and the decline has to have an impact on CO2 emissions.

  50. Tim Macknay
    April 16th, 2016 at 12:09 | #50

    @Ikonoclast
    It’s an interesting question. The IMF figures Ivor has cited show that OECD growth rates are, in general, substantially lower than developing world and middle income growth rates. The suggests something structural about how ecnomies develop that makes high growth rates harder to sustain in an advanced state of development. Again IANAE, so maybe Prof Q or other commenters with economic credentials can shed some light on it (if they’re interested). It could be an artifact, I suppose.

    On your earlier comments, before Ivor’s unique theory of numbers distracted us, I agree that it is too early to express a high degree of confidence that we have indeed reached an inflection point in global emissions and fossil fuel consumption. It is possible that the apparent hiatus in emissions growth is a just a blip or lull. In a sense, Ivor is not entirely wrong, as the apparent slower rate of growth after 2010 has presumably not hurt the cause of reducing emissions. Obviously we need it to be a real inflection, if we are to have a hope of addressing climate change. To me, the direction of various significant trends provide support for the view that the inflection point is real, namely the exponentional growth in renewable energy capacity worldwide, and particularly in large emitting states like China, as well was what looks like a structural decline in the global coal industry.

  51. Tim Macknay
    April 16th, 2016 at 12:16 | #51

    @Ivor
    Ivor, this is the last comment I’m going to make on that particular point. Everyone who is vaguely numerate will consider that your interpretation of the IMF figures in your comment at #40 is mistaken. If you can’t tell the difference between the rate of change of a variable, and the value of the variable, you just can’t be taken seriously.

    I also frankly just don’t understand your insistence that it is impossible to reduce greenhouse gas emissions without degrowth. It’s not as if it’s an ideological requirement of Marxism, or something. But no matter. no doubt you’ll make some sort of snippy riposte, or an attempt at one. Knock yourself out. 🙂

  52. Ivor
    April 16th, 2016 at 12:29 | #52

    @Tim Macknay

    It has been explained to you in very simple terms.

    You do not have to have negative rates to have declines.

    It is amazing that denialists have to resort to such diversions.

  53. Ikonoclast
    April 16th, 2016 at 13:05 | #53

    @Tim Macknay

    Yes, it’s a multifaceted question. I will see if I can break it up into its component questions. Each question is important in its own right and will probably have complex relations to each other question.

    (1) Are there limits to growth?
    (2) Are there limits to the rate of growth?
    (3) Are there limits to quantitative growth?
    (4) Are there limits to qualitative growth?
    (5) How near do limits have to be, to be of realistic concern?

    We probably have to work backwards.

    (5) How near do limits have to be, to be of realistic concern?

    I am guessing most adults would say that the limits have to be near enough to affect us, our children or our grandchildren. This is a supportable position I think in a couple of ways. It is difficult for people to care for very abstract or distant probabilities. Also, beyond that point too many imponderables could occur both in terms of natural disasters and in terms of human progress (or regress). So, we can only assume an understandable or broadly predictable course of human society events about this far, say about 100 years. (Clearly we already know to a high degree of certainty that sea-level rise already in train is likely to run for 1,000s of years.)

    I would say we can only productively worry about and attack the foreseeable problems of the next hundred years, especially in terms of limits.

    (4) Are there limits to qualitative growth?

    In the time span nominated (100 years), it would be very hard to argue against qualitative economic growth continuing, at least sans other limits interposing first. It seems likely science and technology can keep advancing for the next 100 years bringing more qualitative value which can be measured economically.

    (3) Are there limits to quantitative growth?

    Yes, I think it is reasonable to say there are and they are closer than 100 years hence. There is a pretty broad consensus that population growth needs to plateau and might well plateau about 2050 even without disaster or collapse. The same may be said of physical infrastructure. We cannot pave over the entire land portion of the biosphere (that is clear) and neither would we need to if world population stabilised at about 10 billion.

    (2) Are there limits to the rate of growth?

    I guess the more accurate expression of this question is to ask if there are lower limits to the rate of growth in technologically and demographically mature economies. The answer seems to be a pretty clear “yes”. The current limit seems to be less the 3%. Improving technology with a “stasis” or steady state demography might only deliver 1% or 2% economic growth and this is sans environmental limits (and overshoot) and sans internal problems of the economic system. Piketty’s now famous equation becomes important here. Imagine the effects of return on capital being at 4% or 5% in a 1% growth economic system (where workers get none of the income growth anyway). IMO that will get very ugly very quickly.

    (1) Are there near limits to growth?

    This is the big question affected by all of the above. The real danger is overshoot. If we have overshot sustainability thresholds already then we are in heaps of trouble soon. We just don’t quite know it yet. Time will tell. I will be surprised if we don’t have a very good idea by 2030 of how all this will go down. By 2030 we ought to know either that we are screwed or that we are going to squeak through somehow. Then again, I might be biased to thinking I will get a definitive answer before I die. We always seem to expect some kind of definitive existential answer before personal death. It’s such a self-centered bias of course.

  54. Joe Blow
    April 16th, 2016 at 14:17 | #54

    GDP is a shockingly bad measure of growth. IMHO a lot of the so called missing growth is just badly measured and effectively hidden. Mark Perry ( trigger warning – an avowed proponent of the free market ) often writes on this subject.

  55. April 16th, 2016 at 14:26 | #55

    I gained 5.4 pounds in 2010, 4.2 pounds in 2011, 3.5 pounds in 2013, 3.3 pounds in 2014, and 3.1 pounds in 2015. Clearly, I am losing weight.

  56. Ivor
    April 16th, 2016 at 14:46 | #56

    @Ronald Brak

    Your growth in weight is declining.

  57. Ikonoclast
    April 16th, 2016 at 15:25 | #57

    Perhaps Ivor is saying there is a claimed decline in the rate of growth of fossil fuel emissions but not yet an observable decline in rate of growth of CO2 levels in the atmosphere. We just need to be clear that we are talking about declines in growth rates and not declines in total quantities (yet).

    I think it is quite possible other CO2 feedbacks have started which are counter-balancing reduction in growth rates of fossil fuel emissions. Bush fires, peat fires, coal seam fires, vegetation decomposition and methane releases are very likely all increasing now given the greater heat (and habitat destruction around the biosphere. Thus we can reduce fossil fuel use (as other decrease in rate of growth or absolute decrease) and still see atmospheric CO2 levels increase in a basically undiminished manner.

  58. Tim Macknay
    April 16th, 2016 at 15:26 | #58

    @Ronald Brak
    I recommend cutting down on carbs and stair running. It worked for me. 😉

  59. Ikonoclast
    April 16th, 2016 at 15:31 | #59

    Correction.

    Thus we can moderate fossil fuel use (as either decrease in rate of growth or as absolute decrease) and still see atmospheric CO2 levels increase in a basically undiminished manner.

  60. Tim Macknay
    April 16th, 2016 at 15:34 | #60

    @Ikonoclast
    Ivor didn’t mention atmospheric CO2 concentrations. In any case, obviously there will be significant time lag between the beginning of a decline in annual greenhouse emissions and a decline in atmospheric CO2 concentrations. The annual CO2 emission rate has to drop below the annual environmental absorption rate before atmospheric concentrations stop increasing, and it is still well above it at present. People who cite the current Keeling curve data as evidence to dispute the claim that global emissions have stopped increasing just demonstrate that they don’t really understand the dynamics of emissions and atmospheric CO2 levels.

  61. Ivor
    April 16th, 2016 at 15:34 | #61

    @Ronald Brak

    Is your waistline collapsing?

  62. Tim Macknay
    April 16th, 2016 at 15:35 | #62

    @Tim Macknay
    I didn’t mean to imply that you don’t understand it, btw.

  63. John Quiggin
    April 16th, 2016 at 15:51 | #63

    Ivor, you’re incorrigibly wrong on this point, as well as being rude. Nothing more from you on this, please.

  64. April 16th, 2016 at 16:25 | #64

    Ivor, obviously my waistline must be collapsing, but my dietician insists that I’m still gaining weight. In fact, she has directly compared my weight to the world economy on account of how she says it is still growing, it just isn’t growing as fast as it was.

    She says that since I started with a weight of 95 pounds at the start of 2010 each extra pound represents about a 1% increase in weight. So I increased by 5.4% in 2010, 4.2% in 2011, 3.5% in 2013, 3.3% in 2014, and 3.1% in 2015. Just like the world economy.

    According to her I gained a total of 19.5 pounds in that period, which she says is a 21% increase since the start of 2010. And 21% is the amount the world economy grew in that period.

    But I really don’t understand what my dietician is going on about. How can I have increased in weight by 21% since the start of 2010 if I have been consistently gaining less weight each year? I guess she’s just not good with numbers.

  65. John Quiggin
    April 16th, 2016 at 17:27 | #65

    @Joe Blow

    Fortunately, you can get a much better version of the analysis just by searching this blog for “GDP”. Here’s one example

    http://johnquiggin.com/2012/06/25/theres-more-to-good-policy-than-increasing-gdp/

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