Crunch time for carbon sceptics

That’s the title of my piece on the passing of the carbon price/tax legislation, in Thursday’s Fin. It’s over the fold

Crunch time for carbon sceptics

Australia finally has the price on carbon first proposed by John Howard in 2007. Although passage of the Clean Energy Act by the Senate was little more than a formality, it has already changed the terms of debate.

Every day that passes from now on will put the advocates of denial, delusion and delay in a less and less tenable position. While denouncing mainstream science as ‘alarmist’, this group, has long predicted that a carbon price will bring about an economic disaster. As recently as this July, NSW Premier Barry O’Farrell predicted a ‘carbon catastrophe’, a prediction echoed by rightwing think tanks and commentators.

But now that the carbon price is in place, these predictions will be put to the test. With less than eight months to go before the policy is implemented, anyone who seriously believed these claims should be predicting an immediate collapse in investment, and acting accordingly. But among the postmodernists who pass for conservative thinkers in Australia today, any such notion of intellectual consistency is obsolete and old-fashioned.

Already, those who once predicted economic disaster are walking those predictions back. Tony Abbott’s website, for example, states that ‘On the Government’s own figures, three million Australian households will be worse off under the carbon tax.’ Since Abbott doesn’t challenge those figures, he presumably accepts the corollary that the other 5 million households will be better off. Abbott has to fall back on the rather desperate claim that ‘while the tax will increase in the future, the compensation won’t’, a claim that does not suggest much confidence in his own electoral prospects.

Meanwhile, the scientific evidence continues to mount up. A striking recent example was the publication of a report by a team led by one of the few serious scientists sceptical of the mainstream view, Richard Muller. With strong support from other self-described ‘sceptics’, Muller and his team undertook a reanalysis of climate data using 1.6 billion measurements from more than 39,000 temperature stations. Somewhat to his surprise, his results were an almost perfect match for those already reported by climate scientists.

The reaction of the ‘sceptics’ was revealing. Without exception, they rushed to denounce Muller. Clearly the term ‘sceptic’ is inappropriate here. These are ‘true disbelievers’, who will never be convinced by evidence of any kind.

Of course, as those who urged a do-nothing stance on Australia never ceased to point out, we are a small country, accounting around 2 per cent of total emissions. Our efforts will make only a modest difference. The big emitters like the US, China and India are far more important.

None of these countries is likely to introduce an explicit carbon price any time soon. That’s unfortunate, since an economy-wide carbon price is a much more cost-effective way of reducing than the direct action to which Tony Abbott is supposedly committed.

Nevertheless, there are some encouraging developments. In October, without much fanfare, China introduced a nationwide feed-in tariff for solar photovoltaic electric power. China has apparently learned the lesson of many other governments, including that of India, which offered high feed-in tariffs on a limited basis, only to see their schemes massively oversubscribed. The tariff has been set at 1 RMB (about 15 cents) per kilowatt hour. If solar PV can be delivered to the grid at that price, the economic cost of transition to a low carbon economy will be far below current estimates.

Meanwhile the US is taking the direct action route. New fuel efficiency standards announced by President Obama in July will require that fuel consumption of new cars is reduced to an average 54.5 miles per gallon (4.3 l/100km) by 2025. And in the next few weeks, the Environmental Protection Authority will announced regulations limiting CO2 emissions from power stations. These measures should ensure that the recent decline in US emissions continues into the future.

As in Australia, a change in government may see these steps reversed. But, also as in Australia, the intellectual collapse of the right is reflected in political confusion. The disarray in the Republican Presidential field reflects the fact that any candidate who is even minimally serious about the issues is unacceptable to the Republican base. Obama now beats all the Republican contenders in ‘match-up’ polls, though he would lose to a ‘generic Republican’ if only one could be found.

If the world had moved a decade ago, we would now be well on the way to stabilising the global climate. There is still time to achieve that goal at moderate economic cost. Australia, at last, has taken its first big step along that path.

142 thoughts on “Crunch time for carbon sceptics

  1. Jarrah :To be fair, they make the argument that being richer in the future means being better able to adapt to a warming world. They also dispute the idea that the climate will be “destroyed” (as do most people).

    Which is obviously specious if the extra wealth is offset by greater cleanup costs. Actually, more than offset; easier to break something than repair it, especially when it is a chaotic system with various pro-cyclic feedback mechanisms built in (release of methane from melting tundra; extra heat absorbed by what used to be white ice but is now dark blue sea).

    As for ‘destroyed’: it’s a loaded word and it depends what one means. If it means ‘catastrophically altered’ then I think most informed people would concur rather than dispute.

  2. Sam, just what technologies will be used will depend upon the carbon price, but I think wind power is likely to continue expanding in Australia. It currently provides 20% of electricity in South Australia and as its price is continuing to decline it should be profitable to build up wind power in other states even though their wind resources may not match South Australia’s.

    I’m certain a lot of solar PV will be deployed in Australia. There is a lot of room for further price decreases and if people can save money by installing solar PV they will do it. Basically we’re at or close to a point where a point of use PV system can save money for people with low installation costs in sunny areas. Eventually enough PV will be built to drop electricty prices during the day, but a reasonable feed-in tariff scheme should be enough to prevent that fear scaring people off investing in PV.

    In general we have a sort of free electricity market in Australia. This means that people can make a lot of money from supplying electricity when people want it the most. This means there is no need to wet our pants and have a hissy fit over intermittancy. The people who wet their pants over this seem to think that demons will eat us or something if we move away from the rigidly defined peak and off peak electricity rates they had back when a Golden Gaytime was forty cents. Anyway, our current fossil fuel capacity isn’t just going to disappear on us and even if we go carbon neutral we can fire it up as needed and remove the CO2 emitted from the atmosphere later.

    Wave, geothermal, and biomass have potential, but at the moment probably don’t have the capacity to take off like wind and solar. But biomass could play a role in reducing coal use in current or reconditioned coal plants. I don’t see coal plus carbon capture and sequestion being economical. Natural gas plus carbon capture isn’t quite as stupid, but still might not be able to compete with simply growing stuff and dumping it into the ocean.

    For private transportation I think a sales tax on vehicles based on a reasonable calculation of their CO2 emissions would be a good idea. In general, people find it easy to forget about operating costs, but pay close attention to the purchase price.

    The rail system can be improved to help cut emissions from freight. Some steps are being taken in that direction. It would be nice if freight trains could actually reach Sydney harbour during the day.

    Blah, blah, blah… demand management… massive room for energy efficiency improvements… long distance transmission will be improved, but not to a ginormous extent… change car registration from yearly fee to kilometres driven… etc.

  3. @Dan

    Yes obviously. Venus and Mercury have climate, so in this sense, climate can never be destroyed. Everyone knows this. By introducing this, Jarrah has exposed his limitations.

    Capitalists always claim that growth will solve everything – inflation, debt, unemployment, deficit,…etc. It never happens – the overall imbalances always increases, the gulf between rich and poor always increases and the rhetoric from capitalists always increases.

    No one has yet been able to show how any economy based on increasing at the same rate every year can possibly survive without cannibalising some part of itself or its environment (ie destroying future generations).

    No competant scholar, able to publish in university or government refereed journals, contests man-made climate change although the details may be argued.

  4. “Which is obviously specious if the extra wealth is offset by greater cleanup costs.”

    Sure, and I agree, but they do have a legitimate point. The degree of offset is certainly up for dispute, and guesstimates depend a great deal on starting assumptions.

    “If it means ‘catastrophically altered’ then I think most informed people would concur rather than dispute.”

    I disagree. See the IPCC reports and Stern and Garnaut reviews.

    But such judgements also depend on value systems. For example, I think uniqueness has inherent value, so I think the loss of species goes beyond their contribution to the ecosystem and the human economy. Others may not believe similarly, and so don’t care if the spotted-wing moth goes extinct from loss of habitat due to global warming.

  5. ” in this sense, climate can never be destroyed. Everyone knows this.”

    As do I. I was assuming that you used ‘climate’ to mean ‘benign climate human civilisations are used to’.

    “No one has yet been able to show how any economy based on increasing at the same rate every year can possibly survive without cannibalising some part of itself or its environment (ie destroying future generations).”

    It depends on what is increasing. If it’s resource use or proportion of carrying capacity, then you may have a point. If it’s energy use, you don’t – at least until the heat death of the universe. If it’s economic activity, you don’t.

  6. @Ronald Brak
    I know how much of a broken record I sound on this, but nobody is mentioning population offsets! With currently available technologies this should really be the start and end of Australia’s abatement contribution. At $5 per tonne of CO2e abated, this beats everything else hands down, and it hugely encourages sustainable poverty reduction as a byproduct. I don’t say this to minimise Australia’s climate responsibility; I think we can and should pay for enough family planning overseas to go completely carbon neutral as a nation by 2015. It seems bizarre to me that we hear so little about what is clearly the best solution.

  7. @Jarrah

    Most people understand this in economic terms. See the (1+r) term in Sraffa’s ‘Production with a surplus’.

    If (r) increases more than (wages, salaries, supplements and pensions) then unless you can get extra resource from outside (ie plunder future generations or the Third World, or create new people) the system naturally collapses.

    If (r) increases either less or the same as wages etc (which are final consumption expenditures) the system is stable.

    The amount of economic activity is irrelevant.

  8. I’m afraid that Australia cutting CO2 emissions cheaply through population control won’t work, Sam. If funding population control in other countries becomes recognized globally as a legitimate way to cut emissions, then it would become like a carbon credit. And if it’s cheaper than other carbon credits then all countries looking for carbon credits will want in and the price will be bid up and there will be no cheap lunch for Australia. And while in the margin it might be cheap to lower birth rates, once the low hanging ovaries are picked the cost per life avoided would soon increase.

    Then there’s the problem that as we move away from fossil fuels, the carbon credit value of each person avoided through population control will decrease as it will represent a smaller amount of fossil fuels use being avoided.

    And just working out how much carbon credit a life avoided is a headache. In the places where population control measures are the cheapest, very little fossil fuels per capita tend to be used. And improving technology, such as solar PV, means that these areas may never use much in the way of fossil fuels, so it’s a huge accounting problem to work out just how much carbon credit a life avoided in a particular location is worth.

    Then there’s the problem that if population control isn’t recognized as a legitimate way to control carbon emissions and Australia goes out and funds population control but doesn’t cut its own emissions, then Australia will look like a slacker. This is not something we want to happen given the number of people who think like TergeP and would have us trapped in a game theory of mutual self destruction.

    So maybe Australia should go out there and fund people’s ability to control their own fertility, but it should also control its own emissions. And if funding voluntary population control results in huge reductions in carbon emissions, well that’s just gravy. We can pat ourselves on the back and feel good about it. We’re one of the world’s richest countries (the richest according the way some people add things up – weird people) and we can afford to do a good deed without receiving a carbon credit for it.

  9. @Ronald Brak
    There’s actually quite a lot of low hanging ovaries. About 40% of births worldwide are unplanned. Estimates vary, but there’s probably at least 1 Gigatonne per year of CO2e we could cheaply ($5 per tonne) avoid this way. That’s of course not enough to fix the global problem, but it’s twice Australia’s total emissions. If other countries decide to get in on this, then Australia will miss out on a cheap lunch, but who cares? Regardless of who pays, it’s a great investment. If this happened, I would the be advocating the next cheapest abatement technology. In any case, for irrational political and religious reasons, developed countries have historically under-invested in this area. Unfortunately, that seems set to continue. As a world we should decry this as a great development tragedy, but on the plus side it presents Australia with an excellent investment opportunity.

    I found this paper very interesting. It goes through many of your points. Here’s Owen Barder talking about it Yes, working out where best to invest is a headache, and yes, it’s difficult to exactly quantify the results. But even the most conservative lower bound estimates show it’s clearly the best strategy, and the best by far (~ an order of magnitude better than the technologies you were proposing). It makes so much sense that we simply can’t afford to let spurious global perceptions get in the way. What’s more, with a unilaterally enacted carbon tax, we can tell population naysayers around the world to go jump in the lake.

    I’ve only very rarely managed to sway someone on John Quiggin’s blog to my position. If I could convince people of the merits of only one argument it would be this one. Family planning should not be seen as a mere climate bonus, but as the most important single contribution a small country like ours can make.

  10. Sam, family planning can’t be the most important single contribution a small country like ours can make. To stabilise CO2 levels emissions have to be cut by about 80% while median world population growth estimates indicate population will peak at about 30% or so higher than it is today. Cutting our emissions will have to be the most important contribution our country can make.

  11. Ronald – if you have a sense of what carbon emissions are like per capita in different nations, the case for decreasing population in the first world and particularly Australia becomes persuasive. I don’t hold out any hope it will happen though, because it threatens economic growth.

  12. Dan, do you see that emission cuts are the most important thing Australia needs to do to stabilize atmospheric CO2 levels? That an 80% cut in emissions can’t be achieved in the medium term through population control? Population control may be better at reducing emissions than I think it is, but it’s not that good.

  13. I once had a conversation with a red beard. He was in favour of executing prisoners. I said I didn’t like that idea and the man with the red beard got very angry. When I asked him why he was so angry he said it was because I was in favour of rape and murder and car theft. When I explained that I wasn’t actually in favour of these things and that I thought that rape and murder and car theft were bad things he calmed down a lot and we parted on more or less amicable terms even though I still thought that executing prisoners was a bad idea.

  14. Ronald@14 – not very impressed w/red beard’s moral reasoning, which is something like that of a particularly cruel five-year-old. It’s a tremendously binary and limiting world view; to take it to its logical conclusion, should prisoners be executed as inhumanely as possible?

    Is this guy wandering around thinking that everyone except him and a few lone freaks is in favour of crime?

    Maybe the conversation you described was an eye-opener (but I doubt it).

  15. Sorry, this is probably the wrong place to bring up red beard. I went off on a tangent there. It was a bit orthagonal to the discussion. Didn’t hit the right chord.

  16. Well, I think I already covered the main points to story, but I’ll head over to the sandpit and see if there is anything else I want to say about it.

  17. @Ronald Brak
    Ronald, your argument works for the world as a whole, but it expressly does NOT work for a small country like ours given the world we live in.

    As I said before, it’s true that the whole world needs to do a lot more than just family planning to fix the climate. FP could account for perhaps 1-2 Gigatonnes of very cheap abatement, the world needs to find at least 30. However, Australia itself is responsible for only about 0.5 GT. If players in the rest of the world were rational, that very cheap abatement would not be available to us (FP would have been adequately funded by others), but they’re not, so it is.

    We can take the fruit analogy a long way here. As a world, we have to pick almost all the fruit on the tree, both high hanging and low. But if we notice a large bunch of very very low hanging fruit, just under our noses, what should we do? What if all the other fruit-pickers insist on never touching this fruit, but instead climb only to the highest branches and exert the maximum effort? I think it is our duty first of all to loudly alert the others to this easy pickings, but if no one listens it would be silly to likewise climb the tree. Instead, we should spend the same amount of time picking, but fill up many more baskets.

    You might well ask why the rest of the world is so irrational on this point. Crazy religious lobbies are part of the problem. The catholic church’s opposition to contraception is well known. In the US, abortion politics has gotten mixed up in the debate, leading to tragedies like the Mexico City Policy. I don’t think that’s the only answer though. Political and opinion leaders seem to have a cognitive bias towards technological solutions and against social ones. Others seem to think that all offsets are somehow immoral, or less worthy than personal carbon reductions. This seems to apply especially to offsets overseas. I call this type of thinking, “carbon protectionism.”

    There may well be other reasons for the world’s irrationality on this. Our first priority though, should be to exploit an arbitrage opportunity, not to explain it. We should be thinking more like carbon entrepreneurs. And really, 2.5 billion dollars to fully offset Australia’s total emissions is chump change. Even people like TerjeP should be OK with such a small expenditure.

  18. Well, yes, the crazy relgious lobbies are why I think we should help people to control their own fertility without explicity linking it to climate change. For example, crazy Religion A is currently mildly supportive of action to reduce emissions, but that might very rapidly turn around if population control was seen as part and parcel of fighting AGW.

    There is a list of reasons as long as my arm being sucked into a black hole why we should help people to control their own fertility. There is no need to put climate change up the top of that list and draw attention to it. The other reasons more than stand on their own and those are the reasons we should use to promote volunatry population control. To use preventing climate change as a major reason risks a backlash against efforts to reduce emissions. This is me thinking politically, which is something I normally avoid, but I think I am right on this. So my advice is to have climate change as a reason for improving people’s ability to control their fertility, but keep it a quite reason, not a loud one. And the reasons that involve health, dignity, freedom from discrimination and economics should be thundered from the rooftops. Walk loudly and carry a silent stick.

  19. OK, but now you’re shifting to a political argument. Does that mean you concede the economic point? I ask this not to pettily “keep score;” I genuinely would like to know if I’ve convinced you that your previous “30% vs 80%” argument was flawed.

    The main reason people in this country are against fixing climate change is expense. Family planning as abatement is very very cheap; it’s widespread use would virtually neutralise that argument. Our own crazy religious lobbies are a bit less influential than they are in the US. Alan Jones and the hip-pocket are what people care about, not George Pell and the immortal soul. The 5% cut we’re aiming for by 20/20 would then cost less than $10 per person per year – virtually nothing. If it placates the millions of “aspirational voters” in Western Sydney, but enrages a few crackpot religious nutjobs, then I’d say it’s a net political gain.

    You say you want to keep the climate benefits of FP quiet, but that carries a very large cost. It means that this solution – which is the best by far – will continue to be woefully underfunded.

    I agree that fertility reductions are good at solving many problems besides global warming – that’s what’s so frustrating. It improves the status of women, increases children’s education, reduces infant mortality, reduces poverty, reduces non-carbon resource use, prevents deforestation… the list goes on. What’s more, for some of those problems it’s actually the best solution. For all of them, it’s one of the best. It might be quicker to list the global problems it DOESN’T help fix. It’s only a small exaggeration to say we have a pill that can save the world. So why the silence? Why isn’t everybody yelling as loudly as possible about it?

  20. I have been changing my mind to agree with whoever wrote the latest post. But I think both arguments are sensible and you don’t seem to differ that much.

  21. Sam, do I think the 30% vs. 80% comparison is flawed? No, not at all. Consider the two following possibilities. Harry Potter offers to wave his magic wand and either cause world CO2 emissions to reduce by 80%, or keep emissions as they are now but magically freeze the earth’s population at its current seven billion until whatever point it may have dropped below seven billion anyway. Obviously the 80% reduction in emissions is far more effective at stabilizing climate than reducing the world’s peak population by 30 or so percent. In fact, eliminating population growth without reducing emissions doesn’t stabilize climate change at all and we will eventually lose all icecaps and much of the world’s currently most valuable land end up under sea level.

    Now an immediate 80% cut in emissions is unrealistic, by so is an immediate freeze in population growth. It’s plain to see that cutting emissions wins wands down.

    You may be making a more nuanced arguement than this, and there are other things I’d like to discuss, but at the moment the Justice League is signalling me on my immense wall screen, so I have to give up my secret identity for now and fly.

  22. I’m back, crisis averted.

    Sam, you say that at a cost of under $10 a ton population control is the cheapest way to reduce emissions. This isn’t true. I’m not arguing about the cost you give. I have doubts about it, but I’ll accept it for now. But a lot of CO2 abatement not only costs less than ten dollars a ton, it actually makes money. While the carbon price in Australi will start at $23 a ton of CO2, that’s not the cost of abating each ton. It simply means that people will use methods to reduce emissions that cost up to $23 a ton. The average price will be much lower. And there are plenty of ways to reduce emissions that are actually money makers. For example, a light coloured roof costs as much as a dark coloured one but can save hundreds of dollars, or for a large building, thousands of dollars in air conditioning costs a year. A sliding tax that encourages people to buy more fuel efficient cars ends up saving them money each time they buy fuel. A change in building standards can result in much greater energy savings than costs. So if the cost of reducing emissions through population control is $9 per ton of CO2, then there are still plenty of options that are even cheaper. I’m not saying that $9 a ton isn’t a good price, I’m saying it’s not the cheapest option.

  23. Fair enough Ronald. I’m not against those things, but I suspect there aren’t enough such projects cheaper than $10 a tonne to make a serious dent in our emissions. Doesn’t mean we shouldn’t do them of course. I’m completely in favour of present arrangements to price carbon and the proposed price of $23. I just think that when the trading scheme comes into effect, population offsets should be offered at something like their real price. The market can then sort which permits are actually purchased.

  24. Sam: sorry, maybe I missed this before – you’re proposing a don’t-have-a-baby bonus?

    That’s a really good idea, especially if nations with low per capita carbon emission could also be persuaded to offer it (why? because that’s where immigrants to the west, with our high-carbon lifestyles, come from).

    I used to discuss the carrying capacity of the earth with my human geography student housemate. He reckoned that the carrying capacity of the earth was something like two billion (he has a kid now, haha).

    However, again the negative population growth thing conflicts with the prerogatives of economic growth, and for that reason I can’t see it being widely introduced. Imagine what the Oz would say.

  25. @Dan
    Hi Dan, no I wasn’t thinking of such a thing, but it’s an interesting idea. There are two ways to reduce the birth rate: reduce desired family size, or reduce unmet need for contraception.

    The former is a very culturally complex task. It requires a structural change in the way men and women negotiate relationships, and a deep understanding of societal context. Great care must be taken to avoid a pro-natalist backlash like in India. These are the kinds of things Western donor countries have historically been terrible at. The latter on the other hand is a very simple technical task. We buy condoms, oral contraceptive pills, etc, ship them to the country and offer them free to couples who say they want it.

    Even better, we simply supplement existing family planning programs (State or NGO run). Nothing could be simpler, cheaper, or less coercive than that. Desired family size is falling virtually everywhere anyway; Western countries only have to keep up with demand.

    I think discussions of carrying capacity and warnings of doom by Paul Erlich types can be a bit counter-productive politically. A much better political frame is the following; The Earth can support many more people than it does now. So long as we’re prepared to put up with a Fukushima every now and then, live like vegetarians in rural India, and turn all our forests into farms we can probably keep growing to 20 billion.

    In actual fact most people don’t want to live like this, and so couples are choosing smaller families than ever before. Median projections see stabilisation at between 9 and 10 billion people. With heroic advances in technology, unprecedented international co-operation, Western curtailment of resource intensive lifestyles, and the sacrifice of a few more iconic species, people in 2080 might be just OK. Any reduction below this level though, would take pressure off all these requirements.

    So family planning is an investment opportunity, and one with huge future pay-offs for almost everything we care about. it’s a once-off though, by 2030 global TFR will fall to replacement and all the cheap population control projects will disappear. So let’s put everything we have into this once-in-a-lifetime deal!

    PS, now that the paywall is up, no one reads the Oz these days. A great day for democracy.

  26. Sam,

    I just read part of the Oz (it’s a slow Friday arvo here in Perth). Interesting that they and the Guardian are predicting different conclusions from the imminent IPCC report:

    Unfortunately, unless the “governments” drafting the summary for policymakers make their conclusion abso-bloody-lutely clear, this has the potential to be another debacle with both sides saying “Ah, but, it says here……” Not so much “crunch time” as “Seconds out, Round 53”

    Is it too much to hope that this, together with the BEST results, will be the double whammy which ends this so-called confected “debate”?

  27. @AndrewD
    I agree with the substance of what you’re saying AndrewD. As a dedicated couch potato though, I must admit to being a bit confused by your sports metaphors.

  28. Sam :
    PS, now that the paywall is up, no one reads the Oz these days. A great day for democracy.

    But a terrible day for our coffee room’s incredulity and hilarity quotient. Every silver lining…

  29. @Dan
    “‘Gillard fails again’ – analysts. Plus, check out our Health section, ‘why the Labor party gives you cancer.'”

    Sorry Dennis Shanahan, I would like to decline your offer to pay for this kind of news.

  30. Pay wall?

    Australian’s have always wished for a way to make quick and easy donations directly to Rupert. Now we have it.

  31. Rupert and his offspring are not responsible for anything that appears in his newspapers. Haven’t you listened to the evidence provided in Britain?

    He, James and other members of the clan are always the last to know. Even after the public and everyone else. When they find out they are even more shocked (and saddened) than we are. Well worth the millions in salary and bonuses, they are.

  32. Do you think Rupert would use medical help – testosterone injections and probably those cognitive enhancing drugs – to help him cope with the ducking and weaving, as well as the empire building?

    And he’s got those longevity genes,

    Longevity genes come from the mother I think I read the other day – can’t find a link for this assumption – but Rupert’s mum is holding up pretty well for her age.

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