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the postmodernists who pass for conservative thinkers in Australia today, any such notion of intellectual consistency is obsolete and old-fashioned.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.
John Quiggin 
Honestly, Terje, you really don’t care at all about the truth do you? Just a few months ago, I pointed out, here
https://johnquiggin.com/2011/06/01/garnaut-responses/comment-page-1/#comment-150433
that your claims were out by several orders of magnitude. I would be mortified if someone caught me in that kind of error, and would be very careful to correct myself thereafter. But you just forget about it and come back making exactly the same silly claim.
@John Quiggin
Clearly you are not a candidate for libertarianism. Seems you have to have no shame. TerjeP doesn”t even wear a mask!
The porkies don’t stop with climate change denial. And club membership is cancelled if a single lie from that camp is ever admitted.
Be very interesting to see how the attacks evolve on this Big Libertarian who has dared exercise his freedom to speak the truth.
http://www.washingtonpost.com/business/what-caused-the-financial-crisis-the-big-lie-goes-viral/2011/10/31/gIQAXlSOqM_story.html
Probably ex-libertarian as he is already being rounded on by the libertarian collective with as much vigour and viciousness as the Trotskyites, Leninists, Stalinists, Maoists, or other -ists, typically rounded on any quickly to be ex-member who deviated a smidgin from their current orthodox line.
http://reason.com/blog/2011/11/10/fifth-greatest-libertarian-government-bl
Even when libertarians infiltrate government and impose their policies to create the libertarian nirvana in which scoundrels like themselves manage to defraud the populace, the blame lies not in themselves, or their stars, but in the very existence of government! Greenspan was and still seems to think he is a libertarian, but his mistakes cannot be sourced by libertarians to his blind obedience to market worship. No they are all due simply to the existence of government.
This really provides great material for an article on the reality scepticism of the looney libertarian right.
Moderation again!
@John Quiggin
You link to an earlier discussion we had. The errors you pointed out in that discussion were not material to the conclusion and I acknowledged each of the errors in that discussion. One related to the base year for CO2 comparison and one related to revenue versus welfare effects. I then ceased the discussion because you inferred that you would calculate the temperature impact of Australias emission reduction policy in a dedicated thread. Instead you calculated the optimal carbon price based on a quadratic damage curve which was as I said earlier interesting but not compelling. In essence you dodged the question regarding what temperature benefit would arise from the current emission reduction policy. And I suspect that this is because the number is embarrassingly small.
Actually you implied, I infered.
“not material ” ?? You were out by a factor of 1000 !!
And as for linking to Jo Nova – are you really trying to prove that all libertarians are fools? If libertarianism depends on the proposition that mainstream science is a communist conspiracy then it is doomed.
Terje: you should read A Perfect Moral Storm by Stephen Gardiner. That will tell you a little bit about the ethics of “why us, why now” and why it is a completely craven and unconvincing position.
Slightly off topic but prominent and influential Lavoisier Group climate denier and mining magnate Hugh Morgan was invited to Chair the “Tackling Climate Change and Energy Challenges: A Government Business Partnership” panel at CHOGM. Just wondering how, why and what kind of positive contribution to tackling climate change and energy challenges came from someone who very recently described efforts to reduce emissions as “..doing everything possible in recent years to destroy our coal-fired electricity industry in the superstitious belief that carbon dioxide is a pollutant.” Was there some notion of exposing Morgan to the strong acceptance of climate science in parts of the world where public opinion isn’t being manipulated by The Australian Coal Association, Mining Council of Australia and Rupert? Or exposing the the rest of the world to the twisted views of Lavoisier, IPA and Menzies House? What would it take for someone like Morgan to change his stance?
Pr. Q – I think you are overly optimistic to imagine the Right abandoning their comforting illusions.
@Ken: It does happen. I have a libertarian friend who makes Terje look like Leon Trotsky. He’s also a biologist and so understands the scientific method. He came around on climate change and described it as a similar feeling to when he dropped his 9/11 conspiracy beliefs.
I’ve always thought that the most significant benefit of a rich but small country like Australia adopting a carbon tax is in technological development. Australia’s scientists and engineers are capable of making a solid contribution to the development of low carbon technologies – the benefits of which can flow around the world, multiplying their contribution by a large amount.
JQ, I’d like to hear more about why you believe a $50/tonne carbon price would be high enough to keep atmospheric CO2 to 450 ppm.
If implemented globally of course.
Sam, John has an article on that here: https://johnquiggin.com/2011/06/02/why-the-global-carbon-price-should-probably-be-around-50tonne-nerdywonkish-but-not-too-difficult-i-hope/
Personally, as I think it may be possible to remove CO2 from the atmosphere for $50 a ton or less, I think a $50 price on carbon should be sufficient. However, so as not to pollute reasonable discourse, at this juncture I will point out that my estimate of the cost of removing and sequestering CO2 from the atmosphere is lower than most estimates and I could be wrong. And I could be wrong, even though I feel that I am right. But, strangely enough, experience has shown that feeling one is right doesn’t actually indicate that one is right. Funny how that works.
@Ronald Brak
If you’ll look through the comments, you’ll see that I had problems with that post at the time. All JQ seems to estimate is the marginal damage caused by emitting 1 extra tonne of carbon dioxide when the atmospheric concentration is 450ppm.
That seems a bit irrelevant to me; JQ just plucks the level 450 ppm from the warnings of climate scientists. If he’s already happy to accept the apriori decision to hold atmospheric CO2 to this level, thinking about marginal damage caused by exceeding this is not worthwhile.
What I’d like to hear more about from JQ is the actual cost of abatement. To my mind, the natural scientist should give us the “do not exceed level” of emissions, the social scientist should tell us the best way to achieve this.
In the comments, JQ indicated that 450 ppm was where the “marginal damage” and “marginal abatement” cost curves intersect, and that the price of both at that point was ~$50/tonne. He promised a follow-up post on this second topic. That was what I was asking about previously.
So what I’d like to know more about is: what emissions per year could the atmosphere absorb without going over 450 ppm? Also, what world price for carbon would achieve this yearly emissions rate?
Sam, off the top of my head an 80% reduction in current emissions will stabilize the earth at around 450, but it all depends upon the period of time over which those cuts take place. It’s not a straight forward thing to ask. Stabilizing at 350 or 450 will involve an overshoot of the target that would last for decades. Basically if we cut hard and fast now, we could level off at a higher amount of emissions and stabilize at 450 than if we cut emissions slowly. If we cut too slowly we might need to drop emissions down to zero or below to make 450.
I’m not sure off the top of my head but the new Clive Hamilton book Requiem for a Species has some (the?) relevant info as for as the ppm/degrees C relationship goes.
(He thinks we’re in for catastrophe, but that’s possibly another thread.)
Actually, just a correction. Barack Obama, in several Rasmussen polls, would have beat any current Republican candidate except Ron Paul. In the case of Ron Paul, Paul would win 52% to Obama 48%, if AP and Rasmussen polls are to be trusted.
http://finance.yahoo.com/news/Ron-Paul-Bests-Obama-in-bw-3821734650.html
Sam, the critical point of the argument is that, given convex damage costs and convex abatement costs, the results are robust to quite big changes in the parameters. You can double the abatement costs, for example, and you get a target of 500ppm and an optimal price of %75/tonne
@John Quiggin
It’s fine to assert such things. However you never did show any calculation for the temperature impact of the Gillard Carbon tax. You simple said liar, liar pants on fire. I thought you were going to address the question directly in a separate article. However it seems you had something else in mind.
I didn’t say anything about a communist conspiracy. That seems like a straw man diversion designed to change the topic or rally the troops.
A little follow up on my previous comment – thinking that perhaps Hugh Morgan and others understand quite clearly that the science on climate is sound but are too aware of their own short term self interest to ever say so publicly. A bit like this Doonesbury take on the US Right.
Terje,
Your position is an endlessly nonsense argument. What Australia has done is the laying of one environmental action building block of a set of 200. When most of the blocks are in place place there is the very real prospect of limiting global temperature rise by a figure defined by the scientific evaluation, but dependent on the timing of the laying of the blocks.
Your entire platform is that Australia, one of the most successful economies in the world should lay its block last so that you and your kind can maximise their wealth as you see it. But worse still the global network of “profit maximisers” are attempting to ensure that no climate action blocks are laid at all. Their primary device is the endlessly circular argument that no-one should go first. The primary leverage is fear of loss (of “jobs”).
Australia has now taken the oblique position. Apart from the small matter of saving our civilisation, the primary device is the creation of jobs (building a better world), and the primary leverage is the timely application of our economic strength.
Any solid business entrepreneur recognises the advantage of timely development of opportunities and the prudent application of economic strength. Everything that the US GOP, Teaparty, Libertarians, etc, are attempting to do in delaying climate action is the opposite of entrepreneurial engagement. There is a reason for that. This is the battle of “old money” versus “new money”, the battle of entrenched positions against new opportunity.
BilB – I think that ‘old money’ can and will do just fine, if only they exercise a bit of imagination.
@John Quiggin
Ok, but that’s a pretty big difference from 450ppm and $50 a tonne. In your previous post, you argued positively it was $50, and not $75. This implies you have some belief about abatement cost. I understand that these kinds of technology predictions are far more uncertain than climate predictions, but I was wondering if you at least had some more structured way of thinking about the problem than I do.
Quote above should have ended after first paragraph. The rest is my response.
p.s. as for old money I did once inherit a few thousand dollars.
@Sam
” In your previous post, you argued positively it was $50, and not $75.” (emphasis added).
Not true. In the previous post, I noted “Doing a similar exercise with 20 per cent damages, a likely target would be around 425 ppm with a price of $75/tonne. ” (emphasis added). This is a different sensitivity analysis from the one I cited in this thread, but it makes the same point.
@TerjeP “You simple said liar, liar pants on fire. ”
Absolutely not true. I pointed out three separate ways in which your estimates were out by a factor of 10, then offered my own calculation which I turned into a paper for journal publicaiion.
But, now that you’ve made these absolutely false claims, and ignored repeated statements of your erior, I will say it straight out. You’re lying and you know it. I think you’re a better person at this, but you are faced with a sharp choice here. Either stay true to the tribe, and lie, or admit the truth and abandon the tribe. It’s up to you.
One difficulty that people like Hugh Morgan pose is that they are rich enough to ignore the consequences of our global emissions: in other words, they can afford to profit from the externality even while emissions create a well-researched and well-forecast problem, namely a shift in global climate to one that is hotter, and one that has greater extremes in terms of destructive weather. If you are sufficiently rich it is highly likely that you can live an enjoyable life in spite of the consequences of greenhouse gas emissions. It is the regular people, the little people, who cannot expect to duck the consequences.
The big shame in all this is not the existence of rich people who choose to ignore the consequences because they can buy their way out, but the fact that there are so many of the regular people who are willing to defend the interests of the ultra-wealthy as though that will somehow get them a seat at the table, when things go sour for the rest of us. History hasn’t been kind to the regular people who take this course of action, and I see no reason why it will be kind this time. It is a constant mystery why some people stay so blind to our own longer-term interests, and of course to the interests of those who have yet to follow us.
OMG
Crunch time for the all out nuclear option.
Julia Gillard is going to help India “Put a nuclear reactor in every home”. So the country that couldn’t even run some games or other (who remembers) due to rampant corruption is going to have 40 percent of its power, nuclear by 2050. If Japan can’t get its act together on nuclear how much faith ought we to put in India?
Julia Gillard is to take a new slogan into the next election “Julia Gillard, the thinking man’s Tony Abbott.”
Terje,
I use the term “your” in a more collective sense encompassing Libertarian ideology rather than specifically Terje P. I hope we can get to a time (soon) when Libertarians understand the need for suspension of general ideologies as applied to global warming in the interests of the Global Public Good.
Maybe Hugh Morgan will become our next ambassador to India?
JQ – it seems you’re adopting the Graeme Bird debating technique. I’m disappointed. I presume it stems from frustration. It kind of poisons any discussion. I’m not lying but if that is your heart felt belief I’ll have to think about how to proceed.
I have reviewed what you have written a couple of times. Your $50 per tonne argument was full of assumptions. Some of your criticisms regarding my temperature calculation had merit and where I thought so I readily acknowledged them. However I can’t make sense of your conclusions. I’d rather be characterised as dim rather than dishonest. However it is your argument that the carbon tax is worth the cost and prosecuting that argument ought to amount to more than cranky bluster. Perhaps you are simply pleased with writing stuff that persuades your own tribe.
😦
@BilB
Sorry for the confusion. It’s just that you addressed the comment to me so I presumed that your argument was with me.
Don’t worry, they will be ‘next’ generation reactors which are so much safer. These ones will only have a major catastrophe once every 10,000 years. There will be 20,000 of them. That should be a major catastrophe every six months.
Martin Ferguson is ecstatic with joy.
BilB: last time I used the expression ‘public good’ in an argument with libertarians (JC and ‘Mark’ at Club Troppo) I was branded a ‘fascist’.
Intellectual giants, these people; scholars and gentlemen.
@John Quiggin
Fair enough. In the comments though, you did say this; “I haven’t been very clear, obviously. I was making the claim that abatement costs are such that a price of $50/tonne would yield something close to 450 ppm. I’ll revise to spell this out, when I get a free moment.”
I’d be interested to know how you arrived at this belief about abatement cost. What does the abatement supply curve actually look like? What technologies should we use, and how scalable are they? Your numbers don’t sound unreasonable to me, but then again I don’t know how to start thinking about such a problem.
Dan @ 25,
Imagination is not a strength of old money interests. In fact there is quite a clear observable phenomenon that old money makes horrendous mistakes when attempting to “relive” old successes. This goes a long way to explain the reluctance to change from fossil fuels to renewables.
Yes, I’ve noticed it too, frankly I think it’s pathetic and blows the whole libertarian property rights argument (“What’s mine is mine, because I am very clever”*) right out of the water.
*Response: No, you’re not. You just had some dumb luck. Now you have to share your good fortune around to make society better for everyone, particularly those less fortunate than you. Alternatively, we can put you in jail.
Haha, apologies for that little Veblenian digression.
@Terje For the last time. You made numerical statements which I showed were out by a factor of 1000. You now repeat the same statements, arrogantly urging others to “do the math” and ignore my repeated demonstration of your error, instead dragging in an irrelevant red herring/ad hominem.
So, to put it as simply as possible. Do you accept that your original claims were out by several orders of magnitude, or do you want to defend them? Or would you prefer to dance around the question as you’ve done so far?
@Dan
The libertarian corollary of the what’s mine is “because I am very clever” is that what I desire to already have but do not is a state of affairs that is somebody else’s fault – the greens, environmentalists, the climate change conspiracy, collectivists, communists, a long list, and of course, government and regulation, but never my own or never because it would not be just or right for me to have it.
The mental gymnastics one needs to do to convince themselves that, since one is a firm believer in non-coercion, free-market capitalism is the obvious and only choice of economic configuration, are positively Olympic.
Sam, I think the point of putting a price on carbon is so no one has to sit down and plan out which technologies people will use. People will use whatever seems best given their circumstances. For example, if a company with a flat roof can save money by putting solar panels on their roof, they will. And if electricity from coal, the worst CO2 emitter per joule of energy, is more expensive than other options, then power companies will no longer build coal plants. And these decisions will all be made without the benefit of any central plan.
If you want to know which energy technologies I think will be widely used in the future I could tell you, but this would just be a somewhat educated guess. I think it would be better most people’s guesses, but I am sure it would not be as good as some people’s guesses. And this is despite the fact that I feel that my guess is the best guess in the entire world.
@Ronald Brak
That’s fine Ronald, but discussions about caps, emission levels and prices still have to take account of the likely cost of abatement.
Actually, I would like to some opinion on the use of various greenhouse reduction technologies. What are your own thoughts (fallible though they might be).
It really is all over now ….
http://www.bloomberg.com/news/2011-11-15/temperature-extremes-virtually-certain-to-rise-un-draft-says.html
Over the next 5-10 years these stories will increase, but by then it will be too late to respond. So the world makes its own death-bet.
We knew back in 1959 that Antarctica was warming – this was reported in Australian J Science 21.
The only reason we have been led down this disastrous path for the last 60 years is simply because capitalists and others have hankered after economic growth and profits no-matter-what, even if this leads to the destruction of the climate for their grandchildren.
With such trivial responses by world economies, and the unstoppable industrial rise in greenhouse gas emissions by China, India and Indonesia, little can be done. All warnings from the late 60’s and 70’s were ignored.
Today’s policy makers are only addressing peoples “concerns” about greenhouse gas emissions. They are not responding to the hard scientific issues about greenhouse gases, industrial growth and population. Capitalists and growth advocates in parliament, the public service, industry lobby groups and in the media are driving the entire globe to complete ruin – and they know it.
“The only reason we have been led down this disastrous path for the last 60 years is simply because capitalists and others have hankered after economic growth and profits no-matter-what, even if this leads to the destruction of the climate for their grandchildren.”
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).