Month: August 2012

How to solve the solar storage problem

John Quiggin130 Comments

Australians installed more domestic rooftop solar PV in 2011 than in any other country in the world. Despite sharp cuts in subsidies, that seems likely to continue, and raises the question of how this will effect patterns of electricity demand and in particular the capacity of the electricity system to meet peak demand. I just ran across an interesting infographic prepared by a consulting group called Exigency management which puts the question into sharper focus . Under current conditions, demand peaks around noon, remains high through the afternoon, then has another peak in the early evening, as people come home and turn on airconditioning or heating. Widespread takeup of home solar PV will increase supply at the noon peak and even more in the afternoon, but drop off as evening approaches. The result, in the absence of any other changes, will be a system with a demand trough in mid-afternoon followed by a much sharper evening peak.

Source: Exigency

(More graphics here)

What can be done about this? The first point to observe is that the demand projection is under current pricing rules. Any sensible system, faced with a demand pattern like this would set peak prices to cover the actual demand peak, not the one that prevailed under a 20th century coal-based system. But, price incentives alone aren’t satisfactory in the absence of some way of storing energy. There’s been lots of discussion of more-or-less exotic solutions, but there’s a much simpler answer.

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Student union skullduggery

John Quiggin50 Comments

Student politics has long been the playground of budding party apparatchiks keen to try out dirty tricks, but the current Union election at hte University of Queensland goes beyond anything I’ve been seen before. I expect that, when these hacks graduate to adult politics, they’ll make the headlines in due course, and not in a good way.

Over the fold a guest post from Daniel Carr, who has the details

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Maintenance and champerty

John Quiggin31 Comments

Those are the marvellous names for the old common law offences/torts involved in persuading others to engage in a lawsuit for your own benefit (feel free to state more precisely, IANAL).  They’ve mostly been abolished now, which is probably a good thing in terms of alllowing class actions and similar, and they’ve never applied (AFAIK) in international law.

Nevertheless, a reminder of the reason such laws existed has come with the announcement of a WTO complaint by Ukraine against Australia’s plain packaging laws for cigarettes.

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Disappearing Arctic Ice

John Quiggin83 Comments

It looks as if 2012 will set a new record low for Arctic ice extent[1]. As a measure of the impact of global warming, this is depressingly clear-cut. There’s no need to go into arguments about trends and variability, or use any kind of modelling – the ice is melting visibly.

Arctic Sea ice extent

Source: National Snow and Ice Data Center.

fn1. Satellite data on ice extent goes back to 1979. There are other measures, arguably more relevant, such as estimates of ice volume, for which the data set is shorter. They tell an even gloomier stories.

Big tobacco loses again

John Quiggin84 Comments

Until relatively recently, Big Tobacco appeared invincible. Despite the fact that tobacco smoke was full of known carcinogens that would have had a factory shut down if they came out of the smokestack, and ample evidence that exposure to tobacco smoke caused cancer, not to mention the violation of liberty associated with blowing smoke in public places, Big Tobacco effectively resisted even the mildest restrictions on its activities. It was aided by a team of scientists and other “experts” willing to claim that the hazards of smoking were non-existent or overstated (notable names here include Enstrom & Kabat, Gio Batta Gori, Richard Lindzen, Steve Milloy, Fred Seitz and Fred Singer – Google has details).

Virtually all the main rightwing thinktanks in the US and Australia went along with this fraud (AEI, Cato, Centre for Independent Studies, CEI, Heartland and IPA among many others). While they might legitimately have argued part of their case on strict libertarian grounds, that would not have been sufficient to resist restrictions on passive smoking. So, they published attacks on science which any reasonable assessment would have shown to be false. In doing so, of course, they encouraged people to take risks with their own lives and those of others, while happily accepting money from the merchants of death. Whether they were knowingly lying, or merely recklessly indifferent to the truth, this episode should have discredited them forever (it certainly has with me).

But the tide has turned. US litigation in the 1990s exposed a treasure trove of internal documents which eventually led to racketeering convictions for the main tobacco companies. And now the High Court has rejected Big Tobacco’s (legally preposterous) challenge to plain packaging legislation in Australia, made on the supposed basis that it represented a taking of intellectual ‘property’. Not satisfied with one preposterous claim, the tobacco companies are planning another, having bribed the government of Ukraine to make a WTO accusation of trade restraint. Actually, this is a good thing. This case is such an obvious abuse of process, and the litigants so clearly evil, that the WTO will surely not be crazy enough to support their case. In rejecting it, they will probably be forced to set precedents that make future interference with domestic health policy more difficult.

Coming to the policy merits, the current legal status of tobacco is, in my view, a pretty good model for drugs in general – legally available, but with all kinds of promotion prohibited and with an active public health campaign to give accurate information on the associated risks.

A snippet on screening

John Quiggin14 Comments

One of the long-running disputes in the theory of education is whether students are actually acquiring knowledge and skills that will be useful to them and society, both in earning an income and in life generally (among economists this has the unlovely name of human capital theory) or whether the primary purpose is to sort out the most able young people and direct them into the best jobs (screening). I’m a strong advocate of the human capital view, but there have always been some troubling counterexamples, such as the supposed preference of the British Civil Service for employing people with a classical (Latin and Greek) education. While doing some work in the general field, I came across the fact that this actually ceased to be true nearly 100 years ago. I couldn’t use this in the piece I was working on, so I decided to post it here.

There are instances where the ‘screening’ model appears appropriate. At one time, for example, aspirants to enter the British Civil Service were well advised to take a degree in classics from Oxford or Cambridge, since this course was seen as a test of general intellect. This was a long time ago, however. From the 1920s onwards, the most preferred general education for aspiring civil servants has been the PPE (politics, philosophy and economics) degree, particularly that offered at Oxford. No fewer than six members of the current UK Cabinet, along with many senior civil servants and journalists, hold Oxford PPEs. The shift from classics to PPE is a clear indication that the actual content of education is more significant than the screening effect.

There are some big problems with such a political monoculture. But that’s a topic for another post.

The grandfather clause (repost)

John Quiggin30 Comments

With the announcement of the Romney-Ryan ticket, I decided to repost this piece on the most striking (to me) aspect of Ryan’s plans, namely the exemption of those currently over 55 (or maybe those who were over 55 in 2010 or 2011, when the plan was first announced. If everything goes to plan for the Repubs, Ryan would be the presumptive candidate after Romney’s second term in 2020. Coincidentally or not, that’s just about the point when the exemption runs out. People retiring after that will have spent a decade or more paying taxes to support benefits for those grandfathered in, but won’t be eligible themselves.
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The post-mortem

John Quiggin9 Comments

The Labor Party has released a report on the Queensland election debacle. As far as it goes, it’s quite sensible, dismissing silly chatter about the election strategy and other trivia. The main causes of the disaster are identified as
* Too long in office
* Problems in the health system, particularly the payroll fiasco
* The asset sales

The first two of these can be dealt with pretty quickly. Obviously governments can’t last for ever, but reaching your fifth term is the kind of problem you want. As regards the health bungles, I’m reminded of the PM’s observation in The Dish. It’s accurate, but unhelpful to say that bungles like this are to be avoided if possible.

Finally, there’s the asset sales. The committee, probably wisely, avoids judgement on the merits of the issue, but concludes correctly that the decision to announce the asset sales, shortly after the successful conclusion of an election campaign based on a commitment to public investment was a disaster from which the Bligh government never recovered. The Committee also observes that the government’s defeat was made even worse by the hostile reaction from the party base, including unions. I’m not part of the Labor party base, but I certainly made strong public criticisms of the government’s case for asset sales. Given the scale of the resulting defeat, and the appalling policy decisions being made by the Newman government, it’s worth reassessing that course of action.

As an economist, I try to call the issues as I see them, rather than calculating the political consequences. So, I would certainly have expressed the same views on the bogus case advanced by Andrew Fraseer and the Treasury, even if I thought the result would be to reduce the government’s chances of re-election. But, in other capacities, as a blogger for example, I took a political stance against the government. Was this justified?

At this point, we need to push the analysis a bit further. The announcement of the asset sales was a political disaster for the government (as well as being bad policy in most respects), but it could have been recouped if, at any time in 2009 or 2010, Bligh had changed course and admitted that the policy had not attracted the necessary public support. Under these circumstances, her post-flood surge in popularity might well have been sustained. So, those who attacked the government in this period were in fact throwing a lifeline that, if grasped, could have saved it, or at least, allowed for a respectable showing and a strong basis for attacking the LNP. But that didn’t happen, and there was no way to unsay the valid criticisms that had been made of the government. So, the end result was to turn what would have been a thrashing in any case into a wipeout. Still, I can’t see that there was any reasonable alternative. At least now, there is some basis for a critique of the LNP, which there would not have been if I and others had given the Bligh government a free pass.