Glass half-full department

The Copenhagen meeting has produced an agreement, though it’s more of an “agreement to agree” than a concrete deal. Most of the specifics have been left for later. That’s problematic of course, but not as bad as an agreement on specifics that are too weak to achieving anything. The deal (draft text here has several important elements

* A warming target of 2 degrees
* Commitment by the developed countries to spend $30 billion over 2010-12 and aim for $100 billion a year by 2020 in assistance to developing countries with a particular focus on preventing deforestation
* A technology transfer mechanism

Of these, the most significant is probably the deal on deforestation, which has actual money (or at least commitments) attached. Assuming this happens, it’s an outcome more significant than that of any international conference in the last decade at least. And technology transfer is important in a number of ways, particularly as a countervailing force against the pressure for ever-stronger intellectual property protections.

I’m a bit surprised, in that I thought the payments to developing countries would be one of the hardest issues of all, whereas the biggest single sticking point seems to have been China’s objections to transparent monitoring – the kind of silly national sovereignty stuff that is par for the course at these meetings but usually gets smoothed over and traded away by the end.

The 2 degree target has been controversial, with lots of countries calling for a 1.5 degree target. But it’s important to remember that only a couple of years ago, the Stern Review was focusing on a 550 ppm stabilization target, which would most likely be associated with long-term warming of 3 degrees. If we can get agreement now on a 2 degree/450 ppm target, there’s a reasonable chance, given technological progress, of bringing concentrations back down to 350 ppm or even to pre-industrial levels (about 280 ppm) by 2100 and that trajectory would have a fair chance of avoiding any sustained period of temperatures more than 1.5 degrees above 1900 levels. Even that trajectory implies significant environmental damage, but it minimises the risk of large-scale climatic catastrophes.

The next step is for Obama to push Waxman-Markey through the US Senate. I’m confident he can do this, given sufficient Administration pressure on the Senate (including, if necessary, the threat of ending the minority right to filibuster legislation with 40 votes). And, given that he has put his credibility on the line, I’m at least reasonably confident that he will do it.

Looking at the Australian implications, I imagine the Opposition will say that there was no need to pass the ETS before Copenhagen. That would have helped them if they had elected, say, Joe Hockey as leader, and settled on a position of deferring, but ultimately supporting the ETS. But it’s hard to see that it will do Abbott any good – sooner or later, he has to come up with an alternative to the ETS, and no remotely affordable alternative is on offer.

The big disappointment is that the longer timetable will give Rudd the option of going for a double dissolution in the second half of 2010, based on the abortive deal with Turnbull.

196 thoughts on “Glass half-full department

  1. @Fran Barlow
    If everyone (or most) benefit more than the cost, there is a strong argument for the provision of a public good. You are right that some benefiting more than others is acceptable (well, according to Alice and her arguments about equality, maybe not for her), but only on the proviso that trying to reduce the difference is not worth the cost. If we can strengthen the connection between contribution and benefit easily (ie at low cost), for example through a user-pays system of some description, why would we not consider it?

  2. I might add that “the proviso that trying to reduce the difference is not worth the cost” is one of the reasons why pursuing greater equality (of income, of wealth, and others) can be perverse – the mechanisms for doing so may cost more than the benefits they provide. Looking at the historical record, it appears that smallish efforts are not too costly, but bigger ones definitely are.

  3. Its also interesting to note the once grand tram network that operated in Sydney….its demise is stated in this article as being due to its success so heavily was it patronised…
    its service peaking in 1945 at 405 million journeys. Wow imagine that many journeys off our roads now…imagine a publicly funded underground rail network. Imagine how many cars we could get off the roads…with patronage increasing, it would return as revenue. We wouldnt need user pays on roads Jarrah if it came back as train fares and declogged the roads at the same time. The public can be the investor, builder and owner. We dont need to always be seeking out and waiting for the Macbanks of the world to solve our infrastructure problems and the more we divert to the private sector, perhaps the longer we will wait.

    That is the error in our current political direction. Again, Im not suggesting there is NO place for private investment and market initiatives but I am suggesting private sector involvement should not be relied on to the exclusion of major public investment initiatives at all times and in all situations. I think it is a question of balance and the need to acknowledge and accept once more the concept of public goods which has been cast entirely aside over the past few decades

    (Terje doesnt think so but we have agreed to disagree).

  4. @Jarrah
    Jarrah on the question of pursuing equality objectives…that also is a question of balance. Too much inequality creates social disharmony, too little destroys entrepreneurial initiative.

  5. Fran#21

    Given all the impacts on future generations – it is probably more accurate to say that

    “nuclear is the only power source that cannot identify its footprint”.

  6. @Jarrah

    You are right that some benefiting more than others is acceptable (well, according to Alice and her arguments about equality, maybe not for her)

    I suspect her opinion (and mine certainly) would be somewhat influenced by whether the people benefiting more than others were privileged in relation to the category as a whole. If the lion’s share of the benefits go to people who need it most because they are disadvantaged then we have greater ultimate equity.

    Of course, if the opposite were the case, then your standard (most benefit more than the cost) might not apply because the changes might subvert other claims they might otherwise make.

    I’d agree that before one should contemplate a policy aimed explicitly at a more egalitarian distribution of advantages one should be convinced that the intended beneficiaries actually benefit more greatly than the cost to them of the policy, else the move would be irrational.

    There is of course, intrinsic value in societies with narrower differentials of privilege, since it is likely that a greater proportion of the group will at worst achieve baseline satisfaction and feel themselves less at risk of harm from others who are dissatisfied with arrangements. At the top of the scale, the marginal satisfaction advantage of being 10-20% richer is likely in aggregate, to be of much lesser marginal value than it would be to someone at the opposite end or even in the middle of the privilege distribution.

    Accordingly, in the absence of a persuasive reason not to act, narrowing the scope of relative privilege is itself a worthwhile end.

  7. @Chris Warren

    nuclear is the only power source that cannot identify its footprint.

    Not at all. Every part of the fuel cycle and its secondary impacts is documented. If you do it right every gram of waste is accounted for. You can’t say that for coal or gas. What is the “footprint” of crude oil? You can’t even say that you know what the footprint of run-of-the-river hydro is. Nobody really knows that the costs of decomissioning solar panels or CSP or wind will be and as we know, tidal barrages also have a serious and hard to measure footprint. Geothermal activity in Germany has been associated with localised Earth tremors.

  8. Alice – I’m not opposed to tram ways or railways or even overly opposed to public ownership of them. I do however think they should operate profitably lest we encourage the location of populations and industries in the wrong places.

    I don’t generally agree with government ownership of enterprises but I’m much more concerned about high taxes. Not so much on account of the modest redistribution involved but primarily because of the needless churn and the dead weight costs (not to mention compliance and administration costs).

  9. @TerjeP (say tay-a)

    So if “high” taxes obtained but compliance, administration and dead weight costs were modest you’d have little problem with them?

    Rather than specifying what tax regime you’d prefer, wouldn’t it be better to specify what benefits you think ought to be purchased collectively, and at what cost per member of the beneficiary group?

  10. Fran – in terms of the burden of proof and “balance of probabilities” versus “beyond reasonable doubt”. If somebody is accused of a crime (eg rape or theft) and the state seeks to deprive them of liberty as a result then we use the stronger test. To claim that we should take the liberty of unaccused people on the basis of a weaker test seems in my view to be perverse. Why should those accused of crimes against others have a more sacred claim to liberty?

    For example if we are to criminalise the ownership of certain firearms and hand out extreme sentences for those that own them (potentially far beyond the sentence for theft or rape) then surely we should demand a high burden of proof that such laws are going to deliber a significant amount of net increase in utility. Otherwise we will essentially be sending innocent people to prison on the basis of flimsy evidence. Likewise when we criminalise the buying and selling of drugs.

    The courts are right to regard liberty as sacred. The legislature should do likewise.

  11. Fran – regarding #36. I don’t think this marginal approach works. Dead weight, compliance and administrative costs don’t accrue in a liniar fashion. The full cost of adding a government funded dental service to the policy mix will depend on the existing size of government. And there are also dead weight costs associated with the expenditure side of the government equation.

    One crude way to somewhat deal with this is with a rigourous form of democratic control on the size of government using TABOR. The people explicitly choose the size of the public sector that they want and then their chosen government prioritises within that constraint.

  12. @TerjeP (say tay-a)

    If somebody is accused of a crime …

    Yes but this is not the right standard. What we are disccsing here is public policy, which is rather more like Law of Tort or Contract in that it seeks to codify, restrain and/or provide liquidated damages for certain types of nuisance or negligence. One coul;d perhaps see the resoprt of the fiulth merchants to atmospheric industrial dumping as falling on a line between trespass to goods (in this case those called the commons), and conversion by wrongful user as they convert (monetise) an externality — the right to dump waste for free.

    In such cases and also in the Equity Division of the Supreme Courts in Australia, the balance of probability is the correct evidentiary standard. If you’ve ever entered that court, the caution is salient here.

    He Who Comes Into Equity, Must Come With Clean Hands

  13. @TerjeP (say tay-a)
    Terje – I agree re “operate profitably” but like many private business investments – the initial capital investment and consctruction phase is not, in itself, profitable in the short term. The service needs to be able to be provided first before profit can be expected.

  14. Alice – I’m not expecting a form of profitability higher than the private sector. Simply an expected profitable return over the life of the investment.

    Fran – when it comes to regulating emissions that enter a public space then I’d agree that the lesser burden of proof for public policy might apply. My concern was more with the regulation of private property, private income, private space, private trade and private behaviour. Spheres in which strong presumptions of liberty ought to generally prevail.

  15. @TerjeP (say tay-a)

    My concern was more with the regulation of private property, private income, private space, private trade and private behaviour. Spheres in which strong presumptions of liberty ought to generally prevail.

    I can agree that strong presumptions of liberty ought to attach to certain claims — the right to life and by extension, those resources that underpin it — without varying the burden of proof.

    If four people stranded on an island agree that a fifth should be killed and eaten to serve the majority interest in surviving until help arrives, it is easy to see that burden of proof here cannot be satisfied since ultimately, by degrees, the problem resolution must (after the third iteration lead either to one person killing the one remaining other or both agreeing to foreswear it. In either case, the choice is paradoxic and since this situation was authored by the previous acts, it shows that the previous acts were also irrational. We may deduce that the right to life is a compelling claim which trumps other interests and can be set aside only where the person claiming life denies it to others logically estopping his or her own claim.

    It follows that some claims from the social world cannot be entertained and so “proof of net public utility” is not pertinent.

    Can there be any doubt though that if three or those five stranded people draw up a roster to identify water and food and to keep watch for rescue vessels, impose sanctions on shirking or embezzlement, and so forth, that the minority ought to be bound to comply? On the balance of probability, yes, even though a rescue ship were might plausibly appear on the horizon ten minutes after the decision were taken.

  16. I don’t think the minority have any duty to comply. They should tell the majority group to nick off.

  17. @TerjeP (say tay-a)
    Terje – minority groups serve to moderate the majority thus bringing both closer ro consensus. Important dissent. Minorities can be minorities by a majority or a minority. Their degree of influence depends on which category they are.

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