I usually wait a day or two before reposting my Fin column. But the Liberal Party is such a rapidly moving target that this column, drafted on Tuesday, looks prescient in retrospect, but may well be obsolete by tomorrow.
Apologies in advance if this gets posted multiple times. The server is flaky, so I’m using Posterous which works, but sometimes too well. Please comment on the first (lowest on page) version.
Attentive readers of the Letters page may have noticed a letter from The Hon Wilson Tuckey MP (Quiggin sticks to problem not solution Letters 24/11). Mr Tuckey gave his account of a discussion of climate change policy held at Parliament House, organised by the Federation of Australian Scientific and Technological Societies Great Barrier Reef Climate Change Alliance, in which he and I took part. As is usual in such cases, I had a rather different recollection of events. But, since Tuckey appeared to be, in Malcolm Turnbull’s words a fringe figure of the far right, I saw little value in responding.
Now, however, the situation has changed. As one of Turnbull’s earliest and most vociferous critics, Tuckey can consider himself vindicated by the decision of the Liberal Party to replace Turnbull with Tony Abbott, someone whose views on climate change are much closer to his own.
More significantly, as Tuckey himself has pointed out, the proposals presented on his website http://www.wilsontuckey.com.au now represent the closest thing the Liberal Party has to a climate change policy. It may therefore be useful to examine these proposals, and, in the process, to recapitulate some of the points I made during our meeting in November.
As was noted in Tuckey’s letter, I did not discuss the specifics of the government’s ETS policy, canvass alternatives such as a carbon tax, or speculate on the amendments being negotiated between the government and the then leadership of the opposition. The position presented by the Great Barrier Reef Climate Change Alliance was that a 25 per cent reduction in emissions was needed by 2020, and that a market-based emissions reduction policy should be the central approach. We did not seek to promote one market-based policy over another, and my answers to Tuckey’s questions reflected that.
I was however, quite happy to explain the merits of a primarily market-based approach as against a centralised command-and-control solution, in which governments seek to determine and impose by fiat, particular technological fixes for climate change. Within a market based framework, there be room for some policies, such as feed-in tariffs for solar energy, aimed at nudging decisionmakers to adopt new technologies. But the central element must be to ensure that there is a price attached to carbon emissions, whether through taxes or through tradeable permits.
A visit to Tuckey’s website reveals a different approach. Tuckey is an enthusiast for the tidal power potential of the Kimberley region, as indeed am I. Given the incentives associated with a high enough price for carbon, and reforms to the National Electricity Market to encourage more investment in long-distance transmission lines, there is huge potential in tidal energy.
But such an incentive-based approach is of no interest to Tuckey. Rather, he suggests ‘To respond to these problems the Government should take an up front role investing in and developing Australia’s only significant and predictable renewable energy resource which is to be found in the tides of the Kimberley.’
Tuckey also proposes extensive public investment in High Voltage Direct Current transmission lines, noting that ‘China will not have an ETS. It will invest in Hydro, Nuclear and other renewable energy. Its Government is already building an extensive HVDC network.’
There are strong arguments for a return to greater reliance on public investment in energy infrastructure. But, in the context of a policy response to climate change, it is important to avoid ‘picking winners’. There are many candidate technologies for reducing our CO2 emissions, ranging from nuclear power and ‘clean coal’ to extensive investment in energy efficiency.
The most cost-efficient way to choose options for emissions reductions is to ensure that investors in energy infrastructure, public or private, face a price for each tonne of carbon they emit, and earn a return for each tonne they prevent. If that is done, standard commercial criteria will select the most cost-efficient path.
Tony Abbott has effectively ruled out such an option. Having denounced the government’s emissions trading scheme as a massive new tax, he can scarcely embrace the main alternative, a carbon tax. On the other hand, he has committed himself to achieving the emissions reductions promised by Labor.
In these circumstances, the Chinese approach endorsed by Wilson Tuckey is probably the only feasible option. It is, perhaps, surprising that, having elected its most conservative leader ever, the Liberal Party may have to turn to the Communist Party of China for policy guidance. But politics makes strange bedfellows.
John Quiggin is an ARC Federation Fellow in Economics and Political Science at the University of Queensland.
John Quiggin 
@Alice
And as he twists the argument yet again Chris – it takes on a whole new meaning in Andy’s mind and of his making when really he backed into a corner of his own making.
Just remind him “stay with the plot Andy!”
@Jarrah
Jarrah – we dont need to hold fire. You are mortally injured already but we will hold our fire, just to be nice and to give you the last rites.
Chris,
You may have noticed that there is more than one Chris on this forum. I was requesting that of @Chris Warren .
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Alice,
Cut the ad hom for a little while, please. You have had to apologise for it before, I would ask you to tone it down this time, as well.
Andrew
Of course there was poverty before capital accumulation. I said as much above in referring to the way rural and agrarian poverty was extended courtesy of the Industrial Revolution into horrific and even more widespread urban poverty, disease and ill-health with the massive growth in population of England and its cities in the period in question.under discussion.
Capital does create wealth but it necessarily creates poverty, scarcity, war, overpopulation, resource depletion and ruin too. And for this reason its continued uncontested operation in a bounded, finite global environment means that it will probably result in ending the possibility of human life on this planet.
Alice was right in her figures about population growth during this period in Europe. In England and Wales between 1801 and 1851 the population doubled from 10-20 million. In the cities the population growth was out of all proportion. Birmingham, Glasgow and Manchester in this period increased their population by 300-400%!
And all that wealth created really helped the people of these cities didn’t it! Bad housing, dangerous factories, the vicious cruelty of child labour, the huge rise in homeless children whose parents had died or abandoned them, primitive sanitation, meant millions of workers lived and worked and went hungry in cramped buildings that lacked even basic amenities.
@Philomena
Philo – the poverty ridden overcrowded laneways behind the grand mansions on the new boulevards of the great cities of the Industrial revolution as Engels documented so well in “The Great Towns” who reaped the benefits of the industrial revolution (Birmingham, Manchester, Leeds, London etc). No we cant ignore the enormous wealth accompanied by great dispossession and great poverty and great hardship.
I doubt whether these two have every read it. You see, it didnt trickle down easily or well, even in history. I doubt it ever has.
@Andrew Reynolds
Andy – all I ask you to do is stay on track and not twist the argument to suit yourself. Its not acceptable. We are not fools in here and you do have a bit of a record for just doing just that.
As for ad hom – Im not sure what you mean. I merely stated what I see as typical libertarian tactic. If they dont like the way it is going – a slight tweak here and there changes the whole course of the argument…but it is not precise and not correct.
Philomena, I find your arguments about the effects of the industrial revolution unconvincing.
Can I ask you to have a read through this? It might be a real eye-opener. The point is, there was a substantial delay before the positive effects of the industrial revolution were felt.
Try that link again.
@SJ
SJ – how can Philos argument be unconvincing when De Long covers the entire spectrum of the beneficiaries and the great divide between wealth, middle and the poor. Oh… and how far have university professors sunk? Sad really, can no longer afford servants and a horse and carriage to get them to the university.
Great piece of history SJ.
Thanks Alice. You can borrow Jenkins and the surrey tommorrow if you like.
@SJ
Thats a deal SJ. Fascinating piece…
I don’t read graphs, SJ, on principle and preference.
Sorry, words not squiggly lines and numbers connoting precisely nothing unsurprisingly mean nothing to me or most people.
So, what’s your argument?
Philomena, I’m not arguing with you. I’ve offered you a chance to to look at something interesting. Take it or leave it, as you choose.
What is interesting – unlike poor SJ’s offering – is Kenneth Pomeranz’s “Great Divergence” which argues that the IR is only part of the picture in explaining the economic advances of Britain and Europe vis-vis China, Japan and the rest of Asia in the 18-19th century. There were two extra factors, he said, that gave a qualitative but accidental or conjunctural advantage to the Western nations: their need for the invention of steam-driven transport, especially ships, and the existence and proximity of the New World with its mineral and other resources, its slave society and its vast geographical extent. The growth of western empires played a big role and their constituent parts were essentially protected markets.
He also speculates that populations were controlled in this era both in Europe and Asia not by wealth or poverty per se but by longstanding familial, marriage and reproductive customs much like the way polygamy has been used historically in many cultures to limit population growth.
Dear all,
Yet more embarrassment for Andrew Reynolds.
First he tries to deny Friedman’s relevance to the economic desert we have inherited; now he pretends there is some problem with the facts re Treasury’s growth dogmatism.
The Treasury stance, I used, was nothing but a simple first year ECON textbook standard reference. He will find it in the 2nd Australian edition of Samuelson (ed Hancock and Wallace) and presumably others.
If Andrew wants to cast dispersions such as “So far, you have just another bloke spouting BS at the pub” [#34] – when in fact, this was driven ONLY by his own ignorance, then he deserves precisely the same consideration.
Ignorant people can be very disruptive and, in this case, appear to be only seeking attention.
SJ, as I said graphs are of no interest to me. I refuse to even look at them. Always. Too shallow for me. I like deep.
I think I’m starting to understand where Philomena is coming from. She’s a first year history major. Sigh.
SJ
The scales on the charts are confusing. The picture would be very different if they were both scaled proportionately (eg logarithms).
How was the increased participation of women since the 1960’s accounted for?
Anyway I expect we will see more unemployment over the next years or so; irrespective of movements in central bank rates.
You’re correct, Chris. This has all become unbelievably silly.
On the planet where I live, a coal company that wants someone to build and operate a coal washery calls for tenders and ends up negotiating a contract to provide the service. The competitive tendering process means that the coal company gets a competitive price. They certainly don’t stuff around putting a price on coal in the hope that some kind contractor will be kind enough to build the washery.
We clearly need cleaner electricity right now so it makes sense to leave the price of dirty electricity unchanged and for the government to set up a series of contracts for the supply of cleaner electricity and use regulations to insist that clean electricity will be used in preference to dirty electricity. This approach allows the government to control the rate of investment and to set contract boundaries as well as providing more certainty for potential investors, current power generators workers and electricity consumers. Best of all, the average price of electricity only has to ramp up in line with costs since we would not be depending on artificial price increases to drive change. For a more detailed discussion of the issues that need to be considered in the cleanup of electricity see here
John
I think you spotted a critical issue when you noted:
9. Technology selection may have to take into account factors other than investors’ return on investment including:
a. Potential impact on what happens in other parts of the world; e.g., many countries would welcome a low cost way of reducing NCP from coal fired power stations.
b. Overall cost effectiveness.
c. Minimizing transmission losses and grid investment requirements.
d. Vulnerability to localized failures.
e. Matching time and seasonal variation of total clean-electricity output to consumption patterns.
f. Benefits of trialling new technologies such as combinations of heat storage with solar thermal.
a. Potential impact on emissions from other sources; e.g., CO2 sequestration offers the best chance of serious reductions of emissions from cement and steel production.
g. Impact on the Australian coal industry.
But there are many others factors to be accounted for:
1) Ensuring externalities are factored into “investors return”
2) Ensuring that investor returns are not derived from customer losses
3) Ensuring that investor returns for one enterprise are not derived from market manipulation.
4) Ensuring that investor returns are not artificially boosted by increased concentration.
5) Ensuring that investor returns are not artificially boosted by unfair competition including using oppressed inputs from Third world economies.
6) Ensuring that investor returns are presented and compared on a sustainable basis.
One has to be very careful with concepts such as “investor returns” and using “competitive tendering” to achieve economic outcomes, as this can lead to huge losses for others.
@Chris Warren
How is it embarrasing to me that you have failed to substantiate your assertions – you know these ones?
You mouth off (like a bloke in the pub) a long list of names and I am able to cast serious doubt on the list very, very quickly. If I am wrong, I am happy to be corrected, but so far you have not even given a link to where any of them have said what you claimed they said.
I think the embarrassment of failure is, so far, yours.
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Philomena,
What references do you have that life for the working poor deteriorated compared to their previous work as rural poor? How do you account for their choice to left the countryside and move to cities?
The reason coal companies build washeries is because unwashed coal does not attract as high a price as washed coal. The price differencial is the incentive.
Barry Brook has a new blog post up comparing the concrete, steel and land requirements of the new solar thermal plant in Granada Spain to a Westinghouse AP-1000 nuclear reactor. If you were to scale the solar plant in size to deliver the same power at the same capacity factor then the result he gets is as follows:-
In short Solar requires a lot more concrete, a heck of a lot more steel and an astronomically larger amount of land. Given that we will mostly use conventional fossil fuel power to build any replacement power plants any decision to go solar instead of nuclear will entail a lot of additional CO2 into the atmosphere.
http://bravenewclimate.com/2009/12/06/tcase7/
@Philomena
Philo – go back to SJs link. You missed it. Not the graphs. The pdf below it.
@SJ
SJ – Jenkins and the surrey? Cant find. Sounds to me like you have something special there.
TerjeP
You consistently misconstrue things.
While it may be cute to compare steel, concrete, and land between solar and nuclear, a proper comparison is to include the steel, concrete, and land being used for waste storage from solar and nuclear plants, and project this over time.
You also have to balance the risks of a solar accident compared to a nuclear accident.
You also have to balance the use terrorists can make of solar technology to build weapons of mass destruction compared to nuclear.
What is the comparison of land, steel, concrete, diesel fuel between, mining and processing uranium into fuel, compared to producing silicon for solar cells?
Anyway, with the feed-in tariff scheme, solar land requirement could be zero, if enough people simply use their current roof spaces.
I think everyone understands that you can get more energy out of a square centimetre of nuclear fuel, than you can out of a square centimetre of sunlight at 100% efficiency. But such comparisons are irrelevant.
The problem with nuclear, is not steel, concrete, water and land for reactors, but other moral, environmental, military, and inter-generational considerations.
Chris,
There is no way that a rooftop system can provide enough power to power a single house, never mind the requirements of that house and a proportion of commerce and industry – so more land, and lots of it, would be required. Concrete and steel will also be required to build all of the panels – and it is likely to be more, much more, as each panel will be smaller (and therefore less efficient) than it would if you put them all together.
On the mining question – the fact you asked it shows you have not actually read the post that Terje linked to read it and then ask the question.
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If you use the Swedish long term uranium storage method then the land requirements for long term storage are minimal and can be almost anywhere that stable rocks can be found. Fair enough, there will also be additional concrete and steel, but I somehow doubt that it would make up a 15 times differential in concrete and 75 times in steel. Even if it did (and if you had read the linked post you would know) the solar plant may not last the 40 years it is rated for but nuclear has a track record that shows 60 years is viable – so it is also 50% more efficient that way.
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Oh – and got an answer on that list, yet?
@Chris Warren
Since both are near zero …
What use could terrorists make of Australian nuclear hazmat to build WMD? None. Will Australia’s attitude to nuclear power increment the ability of terrorists overseas to make use of such hazmat?
Possibly. If Australia accepts nuclear waste from countries less politiocally stable than OZ who currently store such hazmat, the risk would decline. Certainly though, nuclear power is not a necessary condition for any state that wanted to build such weapons, as the cases of Pakistan and Israel show. If all you want a re warheads, small easy to hide research reactors are a far better approach. Since most of the world’s political classes pay little attention to Australia’s stance on nuclear power and are willing to buy our feedstock, and there is ample stuff lying about that could be used, what we do is at worst irrelevant.
What you really want is secure local regulatory control over the hazmat, or failing that, its transfer to a safe location. With IFR or LFTRs here we could actually degrade this waste while generating power — a win-win: less waste and less of it weaponizable and in any event out of reach of the more nefarious characters on the planet.
Unfortunately, my comment that appeared with “Your comment is awaiting moderation” above the text has now completely disappeared. A pity – it was a good one too.
“that wild assertion of Jarrah’s that economic growth does not lead to an increase in the population”
Naturally, I never said such a thing. Apparently, according to Alice’s method (not mine) for assessing “typical tactics”, social democrats are liars. 😉
As people get richer, they have smaller families – the fertility rate goes down, not the population. But once enough people are rich, and the fertility rate is thus low enough, population does fall. Thus the best way (unless you have a 1-child policy or similar) to sustainably reduce population in the long run is to allow poor people to get rich. This is an uncontroversial phenomenon, widely studied and acknowledged. It is separate to other important factors like education and empowerment for women.
I can’t remember what other issues I addressed in the missing comment, so forgive me if it looks like I’m ignoring someone’s criticism. Feel free to repeat it.
@Jarrah
Jarrah – your exact quote at post number 47 was
“Besides, the best way to reduce population growth is to encourage economic growth.”
Exactly, dear Alice. I most certainly DIDN’T say “economic growth does not lead to an increase in the population”, as you wildly asserted (to put it charitably).
Reducing population growth can be done many ways. At one end of the spectrum, you have genocide, at the other you have my preferred solution – let people control their own lives, where they follow the established pattern of reducing the number of children they have as their income increases.
(In fact it’s a limited virtuous circle – having less children increases your income, leading you to desire fewer children, and round it goes)
Fran
The risks of a solar accident are not zero. Earthquakes have already damaged a solar pond, so this needs to be figured in, as a flood of escaping very saline water can wreck havoc.
I do not think you have much knowledge of the number of accidents that have occurred within the solar industry as you asserted the risk is near zero.
This just demonstrates how some people continually make up facts and post whatever false construction suiting their agenda.
Just Google “Solar Pond Earthquake”.
In the long-run, population growth and economic growth are the real issues. We have to respond to climate change now, so we have to deal with the nuke industry we have now.
All the twaddle in various posts about some form of future “perfect” nuke power generator misses the point.
@Jarrah
Jarrah – you are clutching at straws badly.
@Chris Warren
This response indicates to me that you aren’t serious. The way to calculate risk is to express accidents or other losses in relation to output. By this standard, both nuclear power and solar thermal are close to zero.
The cuirrent configurations for proposed solar thermal do not include “solar ponds” and I can’t imagine why you raise this here as it is completely irrelevant.
In any event we are concerned not with accidents per se, but with casualities i.e. premature death and measuirable injury to humans associated with various approaches to producing power. On this metric, the risk profile of nuclear power compares very well with comparably available sources of fully despacthable power. This is true even of the Gen 2 nukes.
@Chris Warren
What I was saying applies to driving major investment in clean electricity, not every opportunity for reducing net emissions.
Most contracts in the mining industry include specifications, boundaries etc. to ensure quality capacity, efficiency etc. By using a SERIES of contracts approach for the supply of clean electricity instead of simply setting a price for clean or dirty electricity external restrictions can be imposed in a fair way.
For example, it wont matter much at the moment where wind power is installed because it represents such as small part of the total supply. However, this will become more important in the future because the variability of the total wind power system becomes more important. Variability will be reduced by spreading out the location of wind farms. This means that, while the cost of wind power will be lower at some wind power hot spot the overall value of installed wind power after variation is taken into account will be higher if the next wind farm is located well away from the favorite hot spot.
My concept allows that different prices may be negotiated for different contracts. This means that a contract that has limitations on location should end up with a higher price to compensate for this and avoid being unfair to one set of successful investors.
@TerjeP (say tay-a)
I have worked for a number of contract coal processors and I do understand why coal companies do wash coal and why some use BOO contractors to do this. The comment was about the direct approach used by mine owners to set up contracts and its potential application to the clean electricity issue compared to the very indirect, inefficient approach used by systems that depend on “putting a price on carbon”.
@Andrew Reynolds
The last time I looked the total per capita electricity consumption was 10,000 kWh/yr (27 kWh/day). This includes industrial usage. As a rough estimation based on 6 hrs/day at an average output of 0.2 kWh/m/hr you would need 23 m2 of solar PV per person to meet the total demand. Typical roofs are a lot bigger than that. Normal roof top installations only cover a fraction of the roof.
Solar OV is an area where the technology is advancing rapidly. Even now it is a relatively low cost way of providing peak capacity.
@Andrew Reynolds
Andrew, a couple of references for you:
Peter Hall “Cities in Civilisation”, Peter Lane “The Industrial Revolution”, David S Landes “The Unbound Prometheus” and “The Wealth and Poverty of Nations”, John K Walton “Lancashire: A social history 1558-1939”, Hobsbawm’s histories, E.P. Thompson “The Making of the English Working Class”. Fiction: Thomas Hardy, Dickens “Hard Times” Elizabeth Gaskell, “Mary Barton”, “North and South” George Eliot “Felix Holt”, Charles Kingsley “Alton Locke”, Benjamin Disraeli “Sybil”.
@Alice
Do you ever actually engage in debate? Your pattern seems to be: 1) make unsubstantiated assertion; 2) ignore substantive criticisms; 3) pretend the conversation is about something else; 4) deride and insult your interlocutor; 5) declare “victory”.
This whole time you’ve been strenuously arguing against something no-one ever said. How foolish do you feel now?
@John Davidson
Rooftop installations are second-best. At best. Large-scale solar power plants (including solar thermal) are much preferable from an economic efficiency standpoint.
Philomena
I suggest you do not give him oxygen.
Fran
I don’t think people can follow you.
Who said;
This does not apply to me.
The accidents with solar ponds was raised only to demonstrate that your statement;
was wrong.
The fact that my example was a solar pond is not the main point. It should not have caused you to go off on a Quixotic tangent about solar ponds. Any otehr form of solar industry could have been cited.
You have missed the point.
John Davidson
Yes, we’ll just have to see how it all works out.
However I am very wary of any approach driven mostly by simple “investor returns”.
But this could be another story.
@Jarrah
Jarrah – its too hot for this nonsense. I refer you to SJs and Philos references and suggest you do some reading. You asked your opponents to hold fire. I am being polite and doing just that. I gave you reams of info on the history of the surges of population growth associated with the agricultural and industrial revolutions yet you still want to argue that the best way to reduce population growth is to increase economic growth. Its tiring Jarrah because then you want to switch to only one aspect of population determinants (the fertility rate). How about the mortality rate? You have not even addressed the myriad other determinants of population growth. No for you its all down to a fertility rate that only applies specifically to certain regions at particular stages of their development. Now you want to refine your argument, but initially you made an incorrect blanket sattement shown above. Not good enough. You have not even acknowledged other determinants and the positive correlation of population growth with economic growth from history (blatantly obvious evidence Jarrah unless you want to rewrite history?)
Your statement was a blanket statement that cannot be applied in entirety and is incorrect and is a fallacy of composition. Now go away Jarrah. Its you who are being personal here.
“I gave you reams of info on the history of the surges of population growth associated with the agricultural and industrial revolutions”
Yes – you were arguing against something I never said. Admit it – you feel a little silly.
“yet you still want to argue that the best way to reduce population growth is to increase economic growth”
Yes. Do you have a better suggestion?
“you want to switch to only one aspect of population determinants (the fertility rate)”
No switching – it’s the only one I’m interested in.
“How about the mortality rate?”
What about it? Do you want to increase it? LOL
“You have not even addressed the myriad other determinants of population growth.”
Actually, I have. Try reading next time, you might find it useful.
“No for you its all down to a fertility rate ”
Wrong again.
“Now you want to refine your argument”
Wrong yet again. You misunderstood my argument, and now you want to suggest I argued something I didn’t.
“you made an incorrect blanket sattement”
No, I gave an opinion, basing it on the widely understood and plain-as-day phenomena of greater wealth leading to smaller families. I gave my opinion perhaps too succinctly for those slow on the uptake, but that’s because I genuinely believed I was giving an uncontroversial opinion based on common knowledge. Not as common as I’d hoped, evidently.
“You have not even acknowledged other determinants ”
Repeating you errors doesn’t make for an argument.
“the positive correlation of population growth with economic growth from history”
Yes, economic growth makes people live longer and die less, so population goes up. But counteracting that is the universal tendency for people to have a lower fertility rate as they get richer, leading eventually to slower population growth – you know, what I originally said!
“Now go away Jarrah.”
Ha. I forgot 6) wishing opponents would leave you alone in your ignorance.
@Alice
Jarrah’s one-size-fits-all thesis is all the more risible given that fertility and birth rates rose substantially during the Industrial Revolution fuelling that remarkable pop’n growth even though mortality rates were high precisely because of what was seen as improved opportunities/necessities for all members of the family, including children, to be part of the new industrial workforce which also had the effect of encouraging earlier marriages which too became a factor in those increased fertility/birth rates.
@Jarrah
What a lot of twaddle Jarrah…….havent you got an exam to go study for?
Let me put it another way, Alice.
Lower mortality due to economic growth is good, right? Higher education due to economic growth is good, right? Longer lives due to economic growth is good, right? Less hunger and disease due to economic growth is good, right?
So these things (among others) make for greater populations. So economic growth does good things that increases population. Now that population is quite large, there is an argument that we shouldn’t increase it further, or as fast, or even reduce it.
There are many options to choose from, right? So why not let economic growth lead to smaller families and a reduced population growth, even reduced population? Seems like a good idea to me. Tell me why you disagree.