Month: June 2011

Reasons to be cheerful, part 2

John Quiggin77 Comments

There are plenty of reasons to be gloomy about the prospects of stabilising the global climate, but there are also some promising developments, so I’ve started a series on this topic.

I’ve been meaning to write this post for a while, but Stephen Lacey at Grist (via David Spratt on Twitter) has done much of the job for me, and better than I could have. The crucial point is that the cost of solar photovoltaic electricity has fallen dramatically and is almost certain to fall further. In particular reaching the point where it is the cheapest large-scale alternative to carbon-fuelled electricity generation, and competitive (at reasonable carbon prices and in favorable locations) with new coal-fired power.

This makes for some fundamental changes in the debate over climate change and mitigation, even as it reaffirms the central point that advocates of mitigation have made all along, namely that, with an appropriate policy response, the costs of drastic reductions in carbon emissions will be modest in relation to national or global income.

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UnFunRun fundraiser

John Quiggin13 Comments

It’s been a while since we’ve had a fundraiser here, but a great opportunity has just come up. I’ll be attempting a half-marathon as part of the Brisbane Running Festival on 7 August, and there’s an associated fundraiser for the Queensland Cancer Council, which promotes research, awareness and support services. So, I’ve created a webpage for my effort here, where you can donate money (before June 30 if you want to claim it in this year’s tax return!).

A good fundraiser needs a good gimmick, so here goes. I completed my first[1] half-marathon run a week ago, in a time of 1:59:24, staying just ahead of the 2:00:00 pacerunner (someone who runs with a balloon or flag at a steady pace so others can keep pace) the whole time. I was pretty tired and sore by the time I finished – it’s not what you would call a fun run! This time, I want a commitment device to push me to run at 1:55 (or even better!). So, for each $1000 I can raise before race day, I’ll commit my best effort to stay a minute ahead of the 2:00:00 pacerunner. If I can raise $5000, I’ll run at the 1:55 pace as long as I can[2]. And, if there’s $10 000, I’ll try for 1:50, which will really push me to the limit.

I’ll start the ball rolling by promising to give $200 for each minute below 2:00 hours. So, you only need to give $800 to push my time down.

This is a great chance for everyone. If you enjoy the free commentary I’ve provided, please say thanks by giving whatever you can afford. If I’ve annoyed you, toss some money into the pot, and you can enjoy a Sunday morning lie-in thinking about me struggling to keep a punishing pace (at least for a middle-aged academic) over 21.1 km.

I’ll provide regular updates, and thanks to contributors, except for those who prefer to give anonymously.

fn1. I also did one in 2010, but I had to walk a fair bit, so I don’t think it counts.
fn2. No guarantees, as I’ll slow down if I’m feeling knee damage, but I’ll do my best to push on through exhaustion.

Own goals

John Quiggin15 Comments

One great thing about soccer, at least for me, is that it is possible, and (by contrast with other sports where this can theoretically occur) relatively common, to score for the other side[1], thereby giving the language the phrase “own goal”. While not an own goal, I certainly had a missed shot with my prediction back in 2007 that the Liberals would never win another federal election. Technically, I’m still in the clear – the prediction that they would merge with the Nats before regaining office was right for the Queensland parties and may turn out correct at the national level – but the underlying analysis posited that Labor would remain politically dominant at both the Federal and State (except NSW) level for years to come. That prediction was derailed by a spectacular series of own goals on the part of the Labor Party, including

* WA Premier Carpenter’s decision to allow ministers to resume contact with Brian Burke
* The NSW government’s suicidal pursuit of electricity privatisation, thereby turning a defeat that was already inevitable (given past own goals) into a rout
* The Bligh government’s similarly suicidal program of asset sales
* Federal Labor’s dumping of the ETS, followed by the dumping of Kevin Rudd

While there is no particular disaster to explain the narrow defeat of the Victorian Labor government, spillovers from the Federal level probably did enough damage to make the difference.

But after only a short period in office, it seems that both the NSW and Victorian Coalition governments are scoring own goals on a regular basis. In Victoria (as at the Federal level) there have been huge blowups over senior ministers missing Parliamentary votes. And NSW Premier Barry O’Farrell, having campaigned as cuddly and unthreatening, made a huge mistake when he tried to retrospectively reduce the feed-in tariff paid to people who had, in good faith, invested in the previous government’s solar PV scheme. He followed that up by ramming through Parliament anti-union legislation that had not been mentioned in the campaign. Given how far Labor’s stocks have sunk, mistakes like this probably won’t be crucial. But a government that manages to mess up what should be its honeymoon period is unlikely to last for long.

For political analysis, the “own goals” phenomenon presents a serious problem. If you want to estimate things like election outcomes you have to work on the basis of things that are more or less predictable, like economic conditions, ideological positions and so forth. Implicitly, this assumes that politicians do the best they can to win, given the objective circumstances. But if political outcomes are driven primarily by unforced errors like those I’ve mentioned, then predictability goes out the window.

fn1. In Australian football, it is, for course, very common to rush the ball through your own goal for a behind, scoring 1 point for the other side, but preventing a goal worth 6 points.

The innumeracy of the right

John Quiggin37 Comments

I wrote a while ago that most of the denialists touting the line that “there has been no statistically significant warming since 1995” wouldn’t know a t-statistic if it bit them[1]. There’s an even better example in the Letters page of today’s Fin, where JL Goldsworthy of Woorim writes “A carbon tax will save about 0.00001 per cent of anthropogenic emissions, if that”.

We can easily check this estimate. Australia is currently responsible for about 2 per cent of global emissions, and the carbon tax is intended to reduce emissions to 5 per cent below 2000 levels (a target that Tony Abbott also ostensibly supports). Business as usual growth will be at least 25 per cent, so the policy goal is an emissions cut of 30 per cent. Primary school arithmetic tells us that 0.02*0.3 = 0.006 or 0.6 per cent. That is, JL Goldsworthy of Woorim is out by a factor of 60 000.

While this is an extreme case, it’s pretty much routine for the rightwing side of the climate debate. Ludicrous numbers like Goldsworthy’s can be found on just about any rightwing blog you care to visit. I’ve pointed out similarly massive errors by Andrew Bolt, Greg Hunt and Terry McCrann among others.

And they don’t care. The point of the debate is not to get things right but to keep up a steady supply of talking points so that those who have been sucked in by the delusions their opinion leaders spout never catch up with the refutations.

Update Unsurprisingly, this number appears to come from the ludicrous, but dangerous, Alan Jones, already notable for the corruption of Cash for Comment, and for his promotion of race riots, thankfully a rare phenomenon in Australia. It’s hard to say anything good about Jones. But the “respectable” right, exemplified by David Flint and John Howard, embrace and defend him. And not a single self-described “sceptic” has tried to correct this absurd and dishonest claim. If there is a single person on the anti-science side of the debate who cares in the slightest for truth, this is an ideal opportunity to step forward – Bob Carter, Ian Plimer, Don Aitkin and William Kininmonth come to mind as candidates.

fn1. The minority who do know what statistical significance means, and keep circulating this spurious (and now factually false) talking point are even worse. I’ll come back to them in another post.

Neo- and post-

John Quiggin22 Comments

At afternoon tea yesterday, one of my colleagues raised the point that, particularly in Europe, the prefix neo- is automatically taken to be pejorative, with neo-liberal as the obvious illustration. It struck us that the corresponding, positively weighted prefix is post- , as in post-Keynesian, post-Communist and so on. [1]

My thought on this is it reflects an underlying progressivist assumption, shared even by many people who would reject explicit claims about historical progress. Given this assumption “post-X” is good, since it represents an advance on X, while “neo-X” is bad since it represents a reversion to X, implying the existence of some Y which must be post-X.

Feel free to provide counterexamples, contrary explanations and so on.

When will US debt be downgraded? By how much?

John Quiggin20 Comments

The once unthinkable prospect that US government debt might lose its AAA rating has suddenly become a real possibility. In fact, it now seems about as likely as not. The problem is not so much “can’t pay” but “won’t pay”. The US, like quite a few other countries, has some fairly serious fiscal imbalances, but they aren’t pressing in the short run, and there is plenty of capacity to raise additional revenue or cut spending so as to stabilise the ratio of debt to GDP at a sustainable level.

The problem is that even with a stable debt/GDP ratio the total value of outstanding debt keeps growing and the US Congress requires periodic votes to approve this. They are usually the occasion for some grandstanding, but this time the Republican majority of the House of Representatives is seriously threatening a refusal, unless the Democrats agree to massive (and still unspecified) spending cuts. The due date for raising the debt ceiling passed a while ago, but an actual default is being staved off by some sharp accounting tricks, which will apparently work until 2 August. The other day, to prove they are serious, the Repubs introduced a motion for an increase in the debt ceiling, with the express purpose of voting unanimously against it, which they did.

At this point, loud alarm bells have started ringing for the big ratings agencies, Standard&Poors and Moodys. They will have to decide, well before August, whether to downgrade US government debt and if so by how much.
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Weekend reflections

John Quiggin54 Comments

It’s time again for weekend reflections, which makes space for longer than usual comments on any topic. In keeping with my attempts to open up the comments to new contributors , I’d like to redirect discussion, and restatements of previous arguments, as opposed to substantive new contributions, to the sandpit(s). In particular, please post nothing related to nuclear energy. As always, civilised discussion and no coarse language please.

Giving up on the Murray Darling Basin

John Quiggin15 Comments

The Risk and Sustainable Management Group, which I lead at the University of Queensland, launched our Annual Report for 2010 last night (link to large PDF coming soon). I’ll quote from the Foreword

As 2009 drew to a close, it seemed reasonable to expect that 2010 would see a resolution of the Australian political debate over the two environmental issues central to the work of the Risk and Sustainable Management Group: climate change and the management of the Murray–Darling Basin.

In the event, neither of these issues was resolved. The bipartisan agreement in support of an emissions trading scheme collapsed, and the policy was abandoned by the government. Following the August 2010 election, the government restated its support for a carbon price, but the main short-term focus was on the idea of a carbon tax.

Developments in water policy were equally confused. Under the Water Act 2007, passed by the Commonwealth Parliament with bipartisan support, the Murray Darling Basin Authority (MDBA) was required to produce a plan for the sustainable management of the Basin. The release of the Basin Plan was delayed by the election. The MDBA produced a Guide to the Proposed Basin Plan in October 2010 which met with a very hostile response, with copies of the Guide being burned at public meetings of irrigators. The Draft Plan is still under development.

I’m feeling a bit more hopeful about carbon prices than when I wrote that. Labor, Greens and the Independents seem to be holding together, and the public debate shows some increasing recognition that Abbott is an opportunistic hack and that while preferring prejudice to science may make for good talkback radio, it is not a good basis for public policy.

By contrast, the situation regarding the Murray Darling Basin has gone from bad to worse to pretty much hopeless. We had everything needed for a plan that made just about everyone better off: more water for the environment, a good deal for farmers who wanted to switch out of irrigation, no compulsory acquisition, and enough spare money sloshing into country towns to more than offset any reduction in agricultural output. Instead, the process was spectacularly mishandled, most notably by the Murray Darling Basin Authority, who managed to scare everyone into thinking the government was about to confiscate their water. That handed power back to the most reactionary irrigator lobby groups who just want to stay on the old, unsustainable, path as long as possible, while extracting as much money as they can from the public purse. The release yesterday of the Windsor Report suggests that they will get their wish. The central point of the report is that the government should abandon all “non-strategic” purchases of water, while pouring even more money into so-called “water-saving” schemes, which will cost 5-10 billion while delivering little if any additional water.

Perhaps there is a way back from this but I can’t see it at present. For the next couple of years, at least, I plan to give up (or at least scale down) my work on the Basin and focus on more tractable problems like stabilising the global climate, saving the Great Barrier Reef and fixing financial markets.

Why the global carbon price should probably be around $50/tonne (nerdy/wonkish, but not too difficult, I hope)

John Quiggin48 Comments

One of the big frustrations with trying to follow the debate on climate change is that most of the key questions are best answered with large, complicated models. Learning enough to assess these models in one subject area, even in general terms, is a huge task, and learning the details of any particular model is a full-time occupation. But, if we are going to make any real progress, we need numbers we can understand. It seems hopeless, but it isn’t entirely so. One thing I learned very early on about modelling is that, for almost any large complicated model, there’s a small simple model that gives much the same answers to the key questions of interest, if you use it correctly, and choose input parameters consistent with those in the big model. The big model (if it’s a good one) imposes consistency conditions you might miss in a simple model, and also gives detailed answers to lots of more specific questions, but a lot of the time, you can do without that. I’m writing a paper at the moment, trying to answer some of the important in a way anyone can check without spending years mastering a big model.

The biggest question of the moment is: what is the right price for carbon? I’m going to look at this question for the world as a whole, disregarding national differences and so on. If you’ve read the title of the post, you’ll know what answer I reach.

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