My latest in Inside Story, on the tortuous path to global action on climate change
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.
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.
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.
Among the sceptical reactions to China’s part of the joint announcement on climate policy made by the US and China, two were particularly prominent
* The statement didn’t require China to do anything until 2030
* The statement simply reflected “business as usual”
These arguments were almost immediately refuted when China announced, in its http://thediplomat.com/2014/11/in-new-plan-china-eyes-2020-energy-cap/ that it would cap coal consumption at 4.2 billion tonnes by 2020, with total primary energy consumption (including oil and gas) held below 4.8 billion tonnes of coal equivalent. By contrast, in 2013, the estimate was for 4.8 billion tonnes of coal alone. Back in 2010, the US Energy Information Administration was predicting continued growth in Chinese coal assumption to 2035 and beyond.
It’s hard to overstate the significance of the agreement announced today by Barack Obama and Xi Jinping to limit US and Chinese greenhouse gas emissions. The limits are significant in themselves: not enough to guarantee stabilization of greenhouse gas levels at the agreed target of 450 ppm, but enough that we can get there just by ratcheting up an existing agreement rather than by looking for something new.
I’ll write more later, but I wanted to note this event as soon as I could
As I type this, it’s currently 35 degrees, at 9am on an October morning in Brisbane. And, while one day’s temperatures don’t prove anything, a string of studies have shown that the increasingly frequent heatwaves in Australia can be reliably attributed to global warming. We haven’t had an El Nino yet, but according to NOAA, the last 12 months have been the hottest such period on record.
It will be interesting to see what the denialists come up with in response to this combination of record breaking local and global warming. We can safely rule out anything along the lines of “as a sceptic, I like to wait for convincing evidence before accepting a new hypothesis. But, with the steady accumulation of evidence I’m now convinced”. I suspect we’ll get more along the lines of
* Graham Lloyd, reporting a new study by Jennifer Marohasy, showing that the communists at the Met Bureau are artificially pumping hot air through Australian cities to cover up the fact that they rigged the data to show exactly this warming
* The Telegraph, with a front-page story of an old codger saying something like “You think this is hot? Back in ’23, we had heat waves in July so bad that concrete footpaths melted”
* Andrew Bolt will readjust the start dates so he can continue to claim “no significant warming for the past x years”, omitting the crucial word “statistically”
I’ve mentioned quite a few times the spurious calculations offered by Ted Trainer of the Simplicity Institute, purporting to prove that renewable energy can’t sustain a modern lifestyle. But I haven’t looked hard at the other side of the coin; the idea that ‘degrowth’ could provide us with a sustainable, low-tech but still comfortable way of living, based on local self-sufficiency.
Samuel Alexander, also of the Simplicity Institute, has a piece in the Conversation, making this claim. Presumably, unlike energy technology, this is an area where the Institute ought to have some special expertise. Sadly, this does not appear to be the case.
Judging by the comments on my “derp and denialism” post, we seem to be mostly agreed on the proposition, amply demonstrated by economic studies, that the global economy could be decarbonized at a very modest cost in terms of foregone growth. On the other hand, it is equally obvious that the commitments made so far are nowhere near enough to achieve this goal[^1], and that the reasons for this lie in the operation of political systems, most importantly in the US, China and India. This raises several questions
(a) Why have political systems failed to yield the responses we need
(b) Can climate stabilization be achieved without fundamental transformation of political systems
(c) If so, what transformation do we need
(d) If not, what kinds of more limited change do we need
In this context, it’s only really necessary to look at the US, China and India. The EU may drag its 27 pairs of feet a little (it is the EU, after all) but will certainly match anything the US does. And, if the US were fully committed to climate change, denialists elsewhere in the developed world, like Harper in Canada and Abbott in Australia, would have the ground cut from under them.
In the US (and other English-speaking countries), the primary obstacle is not the entrenched power of interests that would lose from climate stabilization such as fossil fuel companies. The big global energy companies, like Exxon and BP, are perfectly capable of shifting their focus from oil to gas and if the market gets large enough, to renewables. In any case, they are balanced by potential losers from climate change like the insurance and finance sectors. Rather, the problem is the climate change denial is a rightwing culture war issue, which has became (one of many) Republican shibboleths.
Sustained action against climate change requires that the Republican party either be marginalized or replaced by something quite different (though it would probably still be called the Republican party). That’s a big challenge, but not impossible. A two-term presidency for Hillary Clinton, even without full control of Congress, would probably be enough to get things done through a combination of regulation and international agreements, the model currently being pursued by Obama. And four losses in succession would probably be enough to force a shift within the Republican party.
The situation in China is more opaque (to me, at any rate) but also more promising. Having been the worst of the spoilers at Copenhagen, and suffered a fair bit of opprobrium as a result, the Chinese leadership now seems willing to take a constructive role. Moreover, the pollution crisis in Chinese cities has led to a dramatic shift in sentiment against coal. So, it seems likely that renewables will be given a fair chance, including effective pricing of coal externalities, which is all they need.
Finally, there’s India. For a long time, Indian rhetoric on the issue was dominated by Third World grievance politics: the rich countries had burned lots of coal to get rich, and India had the right to do the same. But that seems to be changing, in part because most of the losers from climate change are also in the Third World, and in part because India’s coal sector is a total mess, making renewables more attractive. The new PM, Modi (from the deeply unattractive BJP, but that’s another issue) seems strongly committed to renewables. The historical arguments have shifted to the more productive terrain of arguing about how to share an emissions budget constrained by a 2 degree/450 ppm target.
At some level, all this is academic, in the pejorative sense of the term. Either existing political structures, with the kinds of changes I’ve discussed above, will manage decarbonization of the economy, or they won’t. There’s no chance that any kind of fundamental transformation of the political systems of the US, India and China[^1] will take place within the next 10-15 years, which is the time in which the necessary decisions need to be made.
To sum up this post and the previous one: even though the global climate could be stabilized at a very modest cost, the political obstacles are formidable. It may not be possible to overcome them in time, but we have no alternative except to try.
[^1]: I’m a little less confident in making this judgement about China. The apparent solidity of a one-party state can crumble quite fast. But the initial result of such a collapse would almost certainly be chaotic, and the outcome unforeseeable.
[^1}; There used also to be a lot of concern over whether these commitments would be met. While a couple of countries, such as Japan and Canada, have reneged, and Australia seems likely to follow, most of the big players are meeting their targets quite easily, reflecting both the softness of the targets and the low cost of decarbonization.
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.
That’s the headline for my piece in The Guardian. Unsurprisingly, given experience here, the comments section is a mountain of derp. Amusingly, it turns out that there are still paperless office sceptics about, despite ample evidence of that demand for office paper has been declining for years, and now seems set to plummet. The sceptics seem immune to the irony of posting comments in a digital-only newspaper asserting that paper will never die.
Given the extreme tightness of priors regarding energy issues, I expect our renewables sceptics to be even more diehard.
Reader ZM points me to a paper with this title, by Graham Turner of the University of Melbourne. Not only does Turner answer “Yes”, he gives a date: 2015. That’s a pretty big call to be making, given that 2015 is less than four months away.
The abstract reads:
The Limits to Growth “standard run” (or business-as-usual, BAU) scenario produced about forty years ago aligns well with historical data that has been updated in this paper. The BAU scenario results in collapse of the global economy and environment (where standards of living fall at rates faster than they have historically risen due to disruption of normal economic functions), subsequently forcing population down. Although the modelled fall in population occurs after about 2030—with death rates rising from 2020 onward, reversing contemporary trends—the general onset of collapse first appears at about 2015 when per capita industrial output begins a sharp decline. Given this imminent timing, a further issue this paper raises is whether the current economic difficulties of the global financial crisis are potentially related to mechanisms of breakdown in the Limits to Growth BAU scenario. In particular, contemporary peak oil issues and analysis of net energy, or energy return on (energy) invested, support the Limits to Growth modelling of resource constraints underlying the collapse.
A central part of the argument, citing Simmons is that critics of LtG wrongly interpeted the original model as projecting a collapse beginning in 2000, whereas the correct date is 2015.
I’ve been over this issue in all sorts of ways (see here and here for example, or search on Peak Oil). So readers won’t be surprised to learn that I don’t buy this story. I won’t bother to argue further: unless the collapse is even more rapid than Turner projects, I’ll be around to eat humble pie in 2016 when the downturn in output (and the corresponding upsurge in oil prices) should be well under way.
Given that I’m a Pollyanna compared to lots of commenters here, I’d be interested to see if anyone is willing to back Turner on this, say by projecting a decline of 5 per cent or more in world industrial output per capita in (or about) 2015, continuing with a sharply declining trend thereafter. [minor clarifications added, 5/9]
Despite my attempts at zombie-slaying, the myth that Rachel Carson advocated and caused a worldwide ban on DDT, leading to the deaths of millions, keeps being reanimated. I came across an example that is interesting mainly because of its provenenance. It’s by Henry I Miller of the Hoover Institute and Gregory Conko of the Competitive Enterprise Institute. CEI is hack central, so nothing it produces ought to surprise anyone. But Hoover boasts a Who’s Who of (what remains of) the right wing intellectual apparatus: Hnery Kissinger, Condi Rice, John Taylor and Harvey Mansfield, among many others. And Miller was apparently ” founding director of the FDA’s Office of Biotechnology”. So, the fact he can run this kind of thing is good evidence of total intellectual collapse on the right.
The two main authorities cited by Miller and Conko in their critique of Carson are “San Jose State University entomologist J. Gordon Edwards” author of “The Lies of Rachel Carson” and “Professor Robert H. White-Stevens, an agriculturist and biology professor at Rutgers University”. Unfortunately, Miller and Conko don’t reveal that Edwards’ piece was published (like much of his work on environmental issues) in the LaRouchite journal “21st Century News”. And, while describing White-Stevens academic affiliation (dating to the 1950s as far as I can tell), they don’t inform readers of the more relevant fact that, when he offered a patronising critique of “Miss Carson’s ideas”, he was a spokesman for American Cyanamid. That’s right: as refutation of Rachel Carson in 2012, this Hoover Institute Fellow is offering the PR put by a pesticide company in the 1960s, along with a screed by a far-right loony.
I suspect the reason these facts weren’t revealed is that Miller and Conko weren’t aware of them. Their piece looks to have been cobbled together from various bits of flotsam in the rightwing blogosphere.
I’d be interested to see if any of the rightwing luminaries associated with the Hoover Institute is willing either to criticise or endorse this piece. My guess is that tribal solidarity will preclude the former and residual intelligence the latter.
That’s the unsurprising outcome of the Abbott government’s review of the Renewable Energy Target, undertaken by climate denialists associated with the fossil fuel industry. It’s hard to see why they bothered with the formality of holding an inquiry.
It now looks possible that the Climate Change Authority, of which I’m a member, will survive long enough to conduct a further review. The Authority is answerable to the Parliament, not the government, which makes for interesting times when the two are directly opposed, as at present.
I can certainly see some ways in which the RET could be improved, but I won’t canvass them here so as not to commit myself in advance. I’ll observe however, that the Abbott government itself has removed the strongest argument against the RET, namely, that it duplicates the effect of a carbon price (there were valid counterarguments, which I’ve discussed elsewhere, but it was still an important issue)
Now that renewable energy sources like solar and PV are cheaper than new coal-fired power stations in most jurisdictions (anywhere with either favorable conditions or a reasonable carbon price), the big remaining question is that of supply variability/intermittency. As I’ve argued before, this problem is greatly overstated by critics of renewables who assume that the constant 24/7 supply characteristic of coal is the ideal. In fact, this constant supply produces a mismatch with variable demand and current pricing structures are set up to deal with this. A system dominated by renewables would have different kinds of mismatch and require different pricing structures.
That said, for a system dominated by solar PV, meeting demand in the late afternoon and evening will clearly depend on a capacity to store energy in some form or another. There are lots of options, but it makes sense to look first at relatively mature technologies like lithium and lead-acid batteries. Renewable News is reporting a project in Vermont, which integrates solar PV and storage.
The 2.5-MW Stafford Hill solar project is being developed in conjunction with Dynapower and GroSolar and includes 4 MW of battery storage, both lithium ion and lead acid, to integrate the solar generation into the local grid, and to provide resilient power in case of a grid outage.
The project cost is stated at $10 million, or $4m/Mw of generation capacity.
Assuming this number is correct, let’s make some simplifying assumptions to get a rough idea of the cost of electricity and the workability of storage. If we cost capital and depreciation at 10 per cent, assume 1600 hours of full output per year and, ignoring operating costs, the cost of electricity is 25c/KwH. There would presumably be some distribution costs, given the need to connect to the grid. Still, given that Vermont consumers are currently paying 18c/Kwh, this doesn’t look too bad. A carbon tax at $75/tonne would make up the difference.
How would the storage work? I’m starting from scratch here, so I’ll be interested in suggestions and corrections. I assume that the storage is ample to deal with short-term (minute to minute or hour to hour) fluctuations, which are more of a problem for wind.
How about on a daily basis? It seems to me that the critical thing to look at is the point in the afternoon/evening at which consumption exceeds generation (As I mentioned, prices matter a lot here). This is the point at which we would like the batteries to be fully charged. The output assumption suggests an average of about 12 MWh generated per day. If we simplify by assuming that the cutoff time is 6pm and that output drops to zero after that, the system requires that 8MWh be used during the day and 4MWh at night. That wouldn’t match current demand patterns, but if you added in some grid connected power (say, from wind, which tends to blow more at night) and shifted the pricing peak to match the demand peak, it would probably be feasible.
As regards seasonal variability, this would be a problem in Vermont, where (I assume) the seasonal demand peak is in winter. But in places like Queensland, with a strong summer peak, a system with lots of solar power should do a good job in this respect.
What remains is the possibility of a long run of cloudy days, during which solar panels produce 50 per cent or less of their rated output. Dealing with such periods will require a combination of pricing (such periods can be predicted in advance, so it’s just a matter of passing the price signals on to consumers), load-shedding for industrial customers and dispatchable reserve sources (hydro being the most appealing candidate, given that potential energy can be stored for long periods, and turned on and off as needed).
To sum up, we aren’t quite at the point where PV+storage is a complete solution, but we’re not far off.
Thanks to Joe Hockey’s masterful salesmanship, the idea of restoring indexation of fuel exercise, let alone imposing a carbon price, is dead for the foreseeable future. This is one case where, despite my economistic prejudice in favor of price-based measures, I think regulation is the way to go. Australia is one of the few developed countries that does not impose fuel efficiency standards on motor vehicles. Now that the Obama Administration has greatly tightened US standards, we are set to have the most petrol-guzzling car fleet in the entire world.
The Climate Change Authority, of which I’m a board member, recently looked into the issue and concluded that, over the lifetime of a vehicle, fuel efficiency standards matching those of the US would save motorists thousands of dollars. Unfortunately, it’s difficult to factor this saving into the initial sale price, given that it may not be reflected in resale values. Still, this would be one of the easiest and cheapest ways of reducing CO2 emissions.
In the long run, given the demonstrated feasibility of electric vehicles, it should be possible to decarbonize most motor transport at a very modest cost. Once the infrastructure was set up properly, this would also solve a large part of the timing problem created by the fact that peak solar supply is in the middle of the day, when household demand is low, but when millions of cars are parked, and could be recharged.
As recently as the Stern Review in 2006, carbon capture and storage from coal-fired power stations was seen as the most promising clean energy technology on offer. This was before the huge decline in the cost of solar PV and the more modest, but still substantial progress on wind energy. Since then, the technology has dropped off the radar, to the point that many reports don’t even mention it. But I just got an invite to a conference on the subject, so I thought I would take another look.
The blurb refers to a number of projects “Callide and Surat Basin in Queensland, CarbonNet in Victoria, and South West Hub in Western Australia”. A quick survey suggests that these are mostly at “proof of concept” stage, rather offering a technology that could actually be implemented on a large scale. Globally, the site says
The Global Status of CCS Report: February 2014 states that there are 12 large-scale CCS projects in operation globally and nine under construction. Overall, these 21 projects have a total capture capacity of almost 40 million tonnes of CO2 a year.
If my arithmetic is right, the entire global effort is about equivalent to the impact of Australia’s Renewable Energy Target:the large scale component calls for 41 000 GWH a year by 2020: my rule of thumb is 1MWh = 1 tonne CO2.
There’s also a report on CCS in the New York Times, which is optimistic, but very vague on cost.
That’s disappointing: from Australia’s point of view, a cheap, safe method of CCS would have resolved the climate change problem, at least as regards electricity, with no adverse impact on our coal industry. I’d be interested in comments from more informed readers.
So, after some farcical manoeuvres, the Senate has passed Abbott’s legislation removing the carbon price. I hope and believe that this outcome will be reversed in due course, but those who brought it about will stand condemned by history.
It’s not merely that this is a bad policy, which will impose large and increasing costs (depending on how long it takes us to get back on track) on Australia and the world into the future. Even more damning is the fact that this action is entirely based on conscious lies, embraced or condoned by everyone who has actively supported it.
First, and most obvious, no one (least of all Tony Abbott) believes that the government’s “Direct Action” policy is a superior alternative to the carbon price, one that will deliver emissions reductions more rapidly and at lower costs. It is, as everyone knows, a cynical ploy put forward simply to allow the government to say that it has a policy.
In reality, Abbott and the rest want to do nothing, and the motives for this desire are entirely base. For a minority of the do-nothing group, it is simply a matter of financial self-interest associated with the fossil fuel industry. For the majority, however, it is the pursuit of a tribal and ideological vendetta. Their position is driven by Culture War animosity towards greens, scientists, do-gooders and so on, or by ideological commitment to a conservative/libertarian position that would be undermined by the recognition of a global problem that can only be fixed by changes to existing structures of property rights.
Most of these people would describe themselves as climate “sceptics”. There is no such thing. That is, there is no one anywhere who has honestly examined the evidence, without wishful thinking based on ideological or cultural preconceptions, and concluded that mainstream science is wrong. Most “sceptics”, including the majority of supporters of the conservative parties, are simply credulous believers in what their opinion leaders are telling them. Those opinion leaders are engaged, not in an attempt to determine the truth, but in a cultural vendetta against their enemies or in an ideologically-driven attempt to justify a predetermined do-nothing position.
This is a sad day, but one that will come back to haunt those who have brought it about.
A large part of my blogging career has consisted of attempts at zombie-slaying: finding ideas that have been refuted by the facts, but that remain undead. Zombies are hard to kill, but one I thought had been permanently dealt with – the myth that Rachel Carson brought about a worldwide ban on DDT, leading to millions of deaths from malaria. Although quite a few people helped to show that this wasn’t true, the lion’s share of the credit, at least in the blogosphere, goes to Tim Lambert (who stopped blogging a while back, though his site still runs a montly open thread). Tim and I laid out the facts in a 2008 piece in the English magazine Prospect which made the following points
* DDT has never been banned in anti-malarial use
* The failure of DDT to eradicate malaria was due to resistance, promoted by overuse in agriculture and elsewhere, exactly as Carson warned. Bans on agricultural use of DDT helped slow the growth of resistance
* The attacks on Carson were undertaken by tobacco industry lobbyists, seeking (among other things) to pressure the World Health Organization not to undertaking anti-smoking campaigns in poor countries
Whether due to our efforts or not, the DDT ban myth seems mostly to have died. Milloy, whose links to tobacco have thoroughly discredited him, seems to be out of the pundit business altogether. He still has an adjunct perch at the Competitive Enterprise Institute but his web page there shows only two opinion pieces since 2008. AFM is also quiescent – its website doesn’t show any research activity since 2011 and its staff all appear to have paying jobs in free-market thinktanks, suggesting a zombie organization.
But the zombie plague always recurs and just now I’ve seen (via Ed Darrell) another instance, oddly enough in an environmentalist magazine Greener Ideal. The author, one Mischa Popoff is described as ” former organic farmer and USDA-contract organic inspector” and repeats the standard DDT myth before a segue into a defence of GMOs. But, as Ed Darrell points out, Popoff is being a bit cute here. DuckDuckGo reveals that he is in fact a Policy Advisor for The Heartland Institute and a Research Associate for The Frontier Centre for Public Policy (the latter being apparently a Canadian version of Heartland, as is the IPA in Australia. The site is down now, so I can’t check).
As long as Heartland lives, zombie ideas will never truly die.
fn1. As usual, the Australian right commentariat bought this one hook line and sinker. Miranda Devine excelled herself, but Blair, Bolt, Quadrant, the CIS and the IPA were all along for the ride.
Tristan Edis has a nice piece in Climate Spectator contrasting the many statements made by Tony Abbott and Greg Hunt (echoed by Bolt, Blair, Devine, McCrann etc) before the election about the impact of the carbon tax on the price of everything from airfares to supermarket goods with the reality that this impact was minuscule. The implication is that removing the tax won’t have anything like the broad effects on the cost of living that Abbott has promised.
It was this gap between rhetoric and reality that produced last weeks fiasco and the Senate, and may yet derail the government’s entire policy. Taking the government at its rhetorical word, Clive Palmer wanted the ACCC to ensure that all major firms, including airlines and supermarkets, rolled back the cost increases imposed as a result of the carbon tax. Greg Hunt assured everyone that the legislation would do so but it turned out there was no specific reference to anything but electricity. This was for the obvious reason that, in other industries, there was no cost increase to roll back.
All of this gives Clive Palmer, if he wants it, the opportunity to make whatever mischief he chooses. There’s no real way the government can deliver on its rhetoric about reducing the cost of living, so he can demand whatever he wants in the way of add-ons to their legislation.
Along with nearly 60 other Australian economists, notably including John Hewson, Justin Wolfers and Harry Clarke, I’ve signed my name to a public statement urging agreement on a fair, economically efficient and environmentally effective policy to price and limit carbon emissions.
I’m not naive enough to expect that this will have much of an effect, any more than previous statements of this kind I’ve signed. The problem is not, as you might think, that there is serious disagreement among economists on the issue. Opponents of market-based policies to limit carbon emission have tried in the past to organize counter-statements, and have failed miserably. Outside the set of IPA hacks, most recently seen defending the ludicrous claims of the tobacco lobby, there is essentially no disagreement on this (although there is plenty of dispute about the best design, the optimal price and so on).
The problem is, rather, that there is no evidence, and no clever way of framing the issue that is going to convince the tribal right to go against their shibboleths on this issue. If there were, the actual experience of a carbon price of $24/tonne would have done so. In the leadup to the introduction of the carbon tax/price, Tony Abbott described it as a ‘wrecking ball’ that would destroy the Australian economy. Two years later, the economy is still here and not even the government pretends that removing the carbon tax is going to yield any significant benefit.
And the same is true more generally, notably in the US. This NY Times article by Brendan Nyhan makes the point
Once people’s cultural and political views get tied up in their factual beliefs, it’s very difficult to undo regardless of the messaging that is used.
While this is always true to some extent, it’s far more true, at present, of the right (in English speaking countries) than of the left, and far more true of the right today than in the past.
In the end, there’s no way to persuade those on the political right to accept factual truths about (for example) climate change, without also persuading them to abandon the political right.
I’m in the US at the moment, working on papers and experiments involving unforeseen contingencies. I just woke up to the news that Clive Palmer has had a meeting with Al Gore that has led him to support the renewable energy target and an emissions trading scheme (the latter contingent on other countries taking the same route). And, relevant to me personally, he is to oppose the abolition of the Climate Change Authority.
I’ll wait for more news on this. In the meantime, at least I now have an ideal example of an unforeseen contingency.
The Minerals Council of Australia has just published a report it commissioned from Sinclair Davidson of the Institute of Public Affairs, responding to campaigns to encourage divestment from coal. What’s most interesting is the suggestion that Corporations Act and the anti-boycott provisions of the Trade Practices Act could be employed to silence critics of the coal industry. The relevant section, from the conclusion
Finally, the campaign may contravene the letter or the spirit of the Corporations Act. While activists argue that wealth portfolios without fossil fuel stocks perform just as well as those with fossil fuel stocks, the reality is that failing to hold a well-diversified portfolio has substantial economic costs in the form of higher risk and lower returns. So if investors make valuation errors based on the divestment campaign and relinquish high-performing stocks, a breach of the Corporations Act may have occurred.
There is a potential role for the Australian Securities and Investment Commission to examine whether the stigmatisation of the fossil fuel sector via the divestment campaign is a breach of the [Corporations Act].
The divestment campaign would amount to an unlawful secondary boycott if environmental activists were covered by those [anti-boycott] laws. They are seeking to restrict coal mining in Australia by targeting a critical supplier to the sector.
There are quite a few points of interest here. The most obvious is the threat to freedom of speech, something that ought to be of interest to Freedom Commissioner Tim Wilson, formerly of the IPA. In this context, it’s worth noting that campaigners against wind farms (notably including the IPA) would be potentially subject to the same kinds of penalties.
More generally, there’s the question of the anti-boycott provisions and the Trade Practices ACT in general. These provisions involve fairly substantial infringements on freedom, primarily for the benefit of business. The law originally focused mainly on protecting small businesses against a variety of anti-competitive practices of big firms. That sounds good, but there’s an equally good case to be made that the market should be left to sort itself out in such matters, or replaced by public provision when it can’t. The extension of Trade Practices Law to cover unions (under the Fraser government’s Section 45D) and public services (under National Competition Policy) makes the Trade Practices Act one of the central legal instruments for the imposition of market liberalism.
Note: Again, no personal attacks, please. There’s more than enough to criticise in the substance of this piece.
Coming back yet again to nuclear power, I’ve been arguing for a while that nuclear power can only work (if at all) on the basis of a single standardised design, and that the only plausible candidate for this is the Westinghouse AP1000. One response from nuclear enthusiasts has been to point to possible future advances beyond the Gen III+ approach embodied by the AP1000 (and less promising competitors like EPR). The two most popular have been Small Modular Reactors and Generation IV (fast) reactors. Recent news suggests that both of these options are now dead.
The news on the Small Modular Reactor is that Babcock and Wilcox, the first firm to be selected by the US Department of Energy to develop a prototype, has effectively mothballed the project, sacking the CEO of its SMR subsidiary and drastically scaling back staff. Westinghouse already abandoned its efforts. There is still one firm left pursuing the idea, and trying (so far unsuccessfully) to attract investors, but there’s no reason to expect success any time soon.
As regards Generation IV, the technology road map issued by the Gen IV International Forum in 2002 has just been updated. All the timelines have been pushed out, mostly by 10 years or more. That is, Gen IV is no closer now than it was when the GenIV initiative started. In particular, there’s no chance of work starting on even a prototype before about 2020, which puts commercial availability well past 2035. Allowing for construction time, there’s no prospect of electricity generation on a significant scale before 2050, by which time we will need to have completely decarbonized the economy.
Noah Smith’s classic definition of “derp” as “the constant repetition of strong priors” was developed with particular reference to solar energy, to refer to people who’ve taken the view, at some point in the past, that solar energy can’t work, and who are neither willing to change their minds, whatever the evidence, nor to state their views once and for all and remain silent thereafter.
The classic illustration of this would have to be Ted Trainer of the University of New South Wales. For the past 20 years, he’s been writing and rewriting the same paper, showing that renewables can’t possibly sustain a consumer society. Here’s a version from 1995, and from 2003, and here’s the latest.
What’s striking is that, while the numbers change dramatically, the conclusions don’t. The 1995 report says, in essence, that solar PV is totally unaffordable for all practical purposes.  So, our only hope is to embrace a massively simpler lifestyle,
The most recent version, written at a time when cheap solar power is a reality, has much less scary numbers. He estimates that the capital investment required for decarbonization of the economy would amount to 11 per cent of GDP. That’s still an over-estimate but it’s in the right ballpark. Trainer rightly observes that this number far exceeds current investment levels and is unlikely to be attained. But, unlikely as it may be, it would certainly be chosen if people accepted Turner’s conclusion that the only alternative was to live in huts with peat roofs.
And, over time, the insistence on negativity about renewables has led Trainer to promote views that are the opposite of his original concerns about simplicity For quite a few years, his work was published primarily at pro-nuclear site, Brave New Climate.
If Ted Trainer actually wants to help save the planet it’s time for him to abandon the campaign against renewables and urge society to accept the relative modest reduction in the rate of growth of income needed to decarbonize energy supply. Once the prospect of massive extinction has been staved off, we will have plenty of tiem to think about a simpler lifestyle.
fn1. As an illustration, the cost of a system to charge an electric car is estimated at $350 000, an estimate that is supposed to take account of optimistic projections of efficiency gains. These systems haven’t quite arrived yet (as usual, there are a bunch of technical difficulties to be overcome) but it appears they will soon be on the market for less than $10000. These systems have an obvious potential to resolve the problem of mismatch between peak PV availability at midday and peak demand in the evening, and may therefore reduce the conflict associated with the idea of a “utility death spiral”/
fn2. BNC ran into the same problem. In his eagerness to push the idea that nuclear power is the only way to save the planet from global warming, Barry Brook ran slabs of anti-renewable nonsense from climate delusionists such as Peter Lang.
That’s the question I looked at a while back in this piece in the National Interest, which I was too busy to post about at the time. TNI’s headline, which I didn’t pick, is the more definitive ‘China Can Make Nuclear Power Work‘. The key point is that, when France embarked on a crash program to implement nuclear energy in the early 1970s, all the right ingredients were in place: a centralised state in which a skilled technocratic elite could push projects through without much regard to public opinion, the ability to fix on a single standardised design, low real interest rates and preferential access to capital, and the ability to fix pricing structures that eliminated much of the risk in the enterprise.
Over time, these factors were eroded, with the result that as the program progressed, the cost per megawatt of French nuclear plants tripled in real terms. As the Flamanville fiasco has shown, whatever the secret of French success 40 years ago, it has been well and truly lost now. And the picture is equally bleak for nuclear power in other developed countries. New nuclear power is far more expensive than renewables, even after making every possible allowance for the costs of intermittency, the various subsidies available, and so on. That’s why, despite the vast range of different policy settings and market structures in developed countries, the construction of new nuclear plants has been abandoned almost everywhere.
But China today looks, in many respects, like France in the 1970s, a technocratic state-capitalist society with the capacity to decide on, and implement, large scale projects with little regard to anyone who might object. If nuclear power can be made to work anywhere, it’s probably in China.
Obviously, pro-nuclear commenters like Hermit and Will Boisvert are welcome to have their say on this one.
There was a bit of a fuss on the US web late last year about whether solar panels should face south (that is, towards the path of the sun) or west (towards the setting sun). One point that emerged is that, while the electricity generated by west facing panels during the afternoon peak is more valuable, that isn’t reflected in the prices paid by consumers.
But thinking about the situation for new installations in Queensland, and particularly North Queensland, the case for facing west looks strong. The first thing to observe is that, in the tropics, the sun is in the south in summer and the north in winter, so there’s not a lot of benefit in choosing one or the other.
Second, Ergon now has a “time of use” tariff, to be used in conjunction with a “PeakSmart” airconditioner, which has a peak rate of 34c/kwh between 4 and 8 pm on weekdays. That’s almost as good as the 44c feed-in tariff that used to be on offer, and massively better than the 8c rate available to new installations. Even the shoulder rate of 24c is way above the feed-in tariff So, if you are installing panels, you really want to maximize your own consumption and minimise the amount fed back to the grid.
My first cut at a calculation suggests that, with this tariff, solar PV looks pretty good. Assume a cost of $2/watt installed, which is common for large systems, and suppose that, with the western orientation you get 1000 hours a year, equally divided between shoulder and peak. That is, each installed watt of capacity saves you 1 kwH/year, at around 30 c/kwh, for a 15 per cent rate of return. Even if you add back the 70c/watt or so saved by virtue of renewable energy credits, the return is still above 10 per cent.
Feel free to point out arithmetic or parameter errors here.
Following a similar announcement last week by Lend Lease, and earlier announcements by BHP Billiton annd Rio Tinto, mining company Anglo American has withdrawn its proposal to take part in the expansion of the Abbot Point coal terminal. That leaves only two proposals, both from Indian companies owned by billionaire entrepreneurs reminiscent of Bond, Skase and other Australian heroes of the 1980s. Both Adani and GVK are heavily indebted conglomerates of the type that invariably emerge when money is cheap, and mostly collapse when the tap is turned off.
It’s not surprising that these companies have not yet abandoned their bids. Doing so would involve booking huge losses on their mining prospects in the Galilee Basin. But, it’s hard to believe anyone is going to lend them the billions required, not just for the port expansion, but for a 500km rail line and the mine itself. The price of coal is well below the level required to cover the costs of extraction and transport, let alone to provide a return on capital. And if Adani and GKV don’t build the rail lines, the development of the entire Basin will grind to a halt.
The end of the Abbot Point expansion and the proposals to mine the Galilee Basin would be a huge win for the Barrier Reef and the entire planet. The port expansion will involve the dredging of millions of tonnes of waste, to be dumped in the Great Barrier Reef Marine Park. But far more dangerous is the Galilee Basin itself, containing at least 25 billion tonnes of coal. That would produce around 50 times as much CO2 as Australia currently generates every year.
And, unsurprisingly, both Gina Rinehart and Clive Palmer hold big stakes (though Rinehart wisely offloaded much of hers). So, as well as saving the Reef and the planet from some imminent threats, the abandonment of the Abbot port expansion and rail line will clip the wings of some very unappealing billionaires. Here’s hoping.
The announcement that Lend Lease is pulling out of a joint venture bid with Aurizon (the former Queensland Rail freight arm) to participate in the expansion of the Abbot Point coal terminal comes shortly after the Great Barrier Reef Marine Park Authority has approved a proposal to dump dredge spoil from the Abbot Point coal terminal expansion in the marine park area. (The government’s go-to guy for “independent” ethical clearances, Robert Cornall, assures us that there were no conflicts of interest arising from the presence of coal companies executives and employees on the Board. Then he had to rush off to
whitewash investigate the conduct of the government and its agents on Manus Island).
On normal commercial calculations, this decision ought to have made the project more appealing. But the Lend Lease statement withdrawing from the project included the slightly gnomic observation that “Lend Lease remained committed to applying “rigorous due diligence” and considering the environmental impacts of all it projects,” it’s reasonable to infer that the decision made the project more toxic rather than less. The obvious reasons
* Coal projects are attracting more and more opposition, but it’s always possible for the proponents of one project to say that if theirs didn’t go ahead, another, possibly worse one, would. By contrast, when a government that’s busy revoking World Heritage Status announces that the project will involve dumping waste in a sensitive marine park, any company that cares about its public image is going to run a mile
* Given the obvious PR costs, the fact that the proponents went for this, rather than looking for a more expensive but less politically toxic approach to waste disposal suggests that the project is economically marginal, an inference supported by the earlier abandoment of a more ambitious version involving Rio Tinto and BHP.
An obvious follow-on project is: who is financing these projects. It looks as if all the major Australian banks are involved to some extent. Westpac is already running into trouble in New Zealand for financing coal mines in sensitive areas. As major international banks, particularly development banks, start dumping toxic projects like this, the Oz banks are likely to find themselves with a lot of undiversifiable risk.
fn1. Breaking usual protocols, I’ve linked to the Oz. When the Murdoch press calls someons a “Howard defender” and strongly implies that he’s stooge, I think it’s safe to say that the appearance of independence is compromised.
A lot of the discussion of my last post on energy issues was devoted to discussion of energy storage. Rather than get involved in that, I thought I’d collect my own thoughts on this. Broadly speaking, Here are some observations, labelled for convenience and partly derived from this study by the US Department of Energy
(a) Any reversible energetic process represents a potential storage technology. Reversibility entails that some energy is stored (as potential or chemical energy) when the process goes one way, and released when it goes the other. Of course, the Second Law of Thermodynamics implies that we will always add entropy (that is, lose useful energy) in this process
(b) Any technical or social change that shifts the time at which energy is finally used replicates the effects of storage
(c)Energy storage is in much the same position as renewable electricity generation was, say, 15 years ago.
(d) There are a lot of potential approaches, most of which have been developed in niches where particular characteristics are required. For example, car batteries need to store a lot of energy for given weight, household batteries need to store energy for a long time and so on. The needs of a renewable-dominated electricity system are very different and will require substantial modifications of these technologies
(e) With one big exception, there is currently no price incentive, in most jurisdictions to use storage technologies and therefore none are used
(f) The big exception is off-peak hot water. Coal and nuclear systems generate baseload supply when it is not needed for consumption. Price incentives are used to encourage people to store the resulting excess energy in the form of hot water
(g) There’s no technological obstacle, given the availability of smart meters, to changing the timing of hot water systems to reflect actual availability of excess electricity rather than reflecting the assumptions of a coal-based system
(h) All of this applies to electric cars. Even ignoring the possibility of feeding power back into the grid, the economics of electric cars would be drastically improved if they could be charged using low-cost power in times of excess supply (in the case of solar PV, around midday when lots of cars are sitting in parking lots)
(i) Something I just found out from the DoE study: Electric car batteries are considered unfit for services when they fall to 80 per cent of their original charge capacity (recall that energy density is critical for car batteries). But they still have a long potential life as static storage devices. This enhances both the economics of electric cars (since the battery has resale value) and of storage (since the opportunity cost is zero)
Here’s an older post, with a really simple example of how the argument works, once you get away from the fixation on replicating the characteristics of a coal-fired system.