Economists call on climate change policy

I’ve just signed a statement drawn up by a group of economists from the Toulouse School of Economics and the Université Paris-Dauphine, in advance of the current COP21 international negotiation. The aim of the statement is to encourage the parties to aim for a more comprehensive and economically effective agreement that would ultimately supersede the patchwork of voluntary commitments being put forward at present. While the commitments being made for COP21 represent a huge advance on the vague aspirations that emerged from Copenhagen, we should not lose sight of the ultimate goal of decarbonizing the global economy in a way that minimizes the economic costs by taking advantage of the power of price mechanisms.

From an Australian viewpoint, the most important part of the Call is Part 3: “Free rider” behavior must be hindered. The current government’s attempts to position Australia as a free rider on the efforts of others cannot succeed in the end, and will only do Australia harm.

If you’re a professional economist and agree with Call, you can sign it here. More generally, it’s open for discussion in the comments thread.

68 thoughts on “Economists call on climate change policy

  1. If there is one thing Western academics can do it is convene talkfests and issue petitions, statements and open letters.

    why do they call for:

    All nations should ultimately face the same CO2eq price

    what is ultimately?

    why price? and not quota?

    what is the principle before “ultimately” is reached?

  2. A good initiative, Economists.

    I particularly approve of the “free rider” shaming label. It needs to be shouted loud, often and in Canberra.

  3. “what is the principle before “ultimately” (same CO2eq price) is reached?”

    Answer: There are no transport costs for C02 emissions globally.

  4. @Ivor

    To be fair, Western academics other than those who have sold out to corporate capital have very little power. All they CAN do is convene talkfests and issue petitions, statements and open letters. The capitalist system marginalises all critics. It is part of how it works. Andrew Bolt is more influential than all Australian academic economists (and climatologists for that matter) put together. This is not right (morally or empirically), this is not fair, but this is the way it is under this system. I listen to some suburban professionals and semi-professionals in my small circle (not uni academics and anecdotal evidence I know) and every opinion I hear from them on the topics of economics, climatology and immigration is a straight regurgitation of Bolt’s opinions. It is scarey to listen to. You can be sure I am not game to open my mouth due to fear of losing my temper quite spectacularly with basically good people whom I like in every other way. I am not quite ready to be the Mad Marxist Fool On The Hill that nobody will talk to.

    So where will change come from? I think it comes when this system fails spectacularly and the bulk of the middle class start to hurt badly economically speaking. The denouement is pretty close now historically speaking (one or two decades maybe).

  5. The current government’s attempts to position Australia as a free rider on the efforts of others cannot succeed in the end, and will only do Australia harm.

    Isn’t “… cannot succeed in the end, and will only do Australia harm” inconsistent with there being the structural failings that give rise to free rider issues? That is, if that is the case then surely there aren’t the faulty incentives that would drive such externalities?

  6. @Ivor

    I am very tempted to refer you to Karl Marx but this would be unfair because I do know you will not find anything about negative externalities in his writings.

    Consider two geographical locations, A and B, and a physical thing which is produced and sold at A and it is sold at B. If the thing is sold at A at price p(A) then, it is sold at B at price p(B) where p(B) = P(A) + transport costs (all else being equal; for example exculde strategic behaviour on part of the producer of the thing such as selling at dumping prices – less than production costs – at B to gain market share or prevent a potential competitor from becoming an actual competitor at B). Now, there are no transport costs for the distribution of CO2 emissions – they spread all by themselves. This leaves, I suppose, the question of why ‘ultimately’ and not ‘immediately’. The short answer is uneven development in the ‘global economy’. That is, some so-called developing countries or war ravaged countries have large populations who live at subsistance levels and rely on foreign aid and some of these have contributed very little to the build up of CO2 levels. It wouldn’t be either fair or financially feasible to ask them to pay the same price. There is also an institutional framework to be developed for a truely international market for CO2 emission permits. This takes time even for so-called developed countries.

    Why not quantities? Emission permits imply quantity restrictions.

  7. Free ride???

    but, but… “We are a nation of lifters, not leaners. We are a great nation. We are a great people.”

  8. @Ernestine Gross

    “Nature becomes for the first time simply an object for mankind, purely a matter of utility; it ceases to be recognized as a power in its own right; and the theoretical knowledge of its independent laws appears only as a stratagem designed to subdue it to human requirements.” – Marx.

    Note that nature does not “cease to be a power” in Marx’s view (of capitalism’s interaction with nature). It “ceases to be recognized as a power.” The difference in wording is crucial and contains an implicit recognition of an antithesis*. But perhaps this is just too subtle for those who want to see the precise phrase “negative externalities”.

    * Note: The natural antithesis to capitalist production is the negative externality.

  9. In addition to my above post I should add this quote from Engels.

    “Let us not, however, flatter ourselves overmuch on account of our human victories over nature. For each such victory nature take its revenge on us… we are reminded that we by no means rule over nature, like someone standing outside of nature, but that we … belong to nature, exist in its midst, and that all mastery of it consists in the fact that we have the advantage over all other creatures of being able to learn the laws and apply them” – Engels.

    If this doesn’t scream “negative externalities!” (among other things) then I don’t know what does.

  10. And what exactly would this CO2 price be actually priced in? Its one thing to have a global public good but another not to have single global economy with a single currency. Rather we have regional currencies which are highly dependent on trade flow (the very thing that causes CO2 emmissions). Now lets say a tradable commodity can be defined and traded. It then must be traded based on the purchasing power of these currencies. Importantly, how does a less developed country grow when its costs of abatement are much higher. Sorry, Greece your Drachma now only affords you half of your output. Welcome back to the agrarian economy. Ultimately economists need to contribute more to addressing how to price a gobal externality that does not exploit developing or undeveloped economies. How will the externality be converted into a tradable commodity, what will it be priced in, how is that price adjusted for regional development differences. Be interesting to see how many developed nation economists appear on that list relative to those from undeveloped countries.

  11. @Aardvark

    “Be interesting to see how many developed nation economists appear on that list relative to those from undeveloped countries.”

    Perhaps it will be interesting or perhaps it will be predictable; what do you think the distribution will look like?

    Do you have a hypothesis, tentative or not, for the outcome whatever it be?

  12. Broadly speaking, capitalism has captured the entire world just as Marx predicted. The contemporary European situation (EU crisis) is only this prediction embodied forth in one region of the world. The climate crisis or more broadly the ecological crisis more effectively contains the seeds of destruction of the capitalist system than any other phenomenon including worker oppression. We need to revisit what Marx said.

    “The bourgeoisie cannot exist without constantly revolutionizing the instruments of production, and thereby the relations of production, and with them the whole relations of society. … Constant revolutionizing of production, uninterrupted disturbance of all social conditions, everlasting uncertainty and agitation, distinguish the bourgeois epoch from all earlier ones.”

    “The bourgeoisie, by the rapid improvement of all instruments of production, by the immensely facilitated means of communication, draws all, even the most barbarian (sic), nations into civilization. The cheap prices of its commodities are the heavy artillery with which it batters down all Chinese walls, with which it forces the barbarians’ intensely obstinate hatred of foreigners to capitulate. It compels all nations, on pain of extinction, to adopt the bourgeois mode of production; it compels them to introduce what it calls civilization into their midst, i.e., to become bourgeois themselves. In one word, it creates a world after its own image.”

    Has all this not happened exactly as Marx predicted? His accuracy of analysis, his prescience in prediction are astounding. It is even possible to understand why a “socialist” revolutions like Lenin’s or Mao’s were premature and bound to fail. The progress to fully global capitalism has to occur first. Capitalism by its inherent systemic and thorough-going nature had to and was bound to triumph everywhere first before preconditions for a socialist revolution could be met. Equally, it is clear why the Western “Left” had to fail at or near the general peak of capitalism. The failure of the left was part and parcel of the complete (and systemically certain) triumph of capitalism.

    “It (capitalism) compels all nations, on pain of extinction, to adopt the bourgeois (capitalist) mode of production..” Here is a perfect expression of Realpolitik or if you will of the geostrategic importance of economic capacity (Paul Kennedy) and its facilitated military projection as per “Offensive Realism” (John Mearsheimer).

    Capitalism is a far more powerful production system (with the aid of science and technology) than any production system which has gone before. While it still has boundaries, boundaries beyond which capitalism does not yet exist, it still has fertile grounds for expansion: downtrodden peasants (subsistence farmers) as yet not transformed into exploited workers and natural world as yet not completely pillaged and ransacked for raw materials and bankrupted of its bio-services.

    The denouement comes and can only come when there are no more “peasants” to transform into exploited workers and/or no more natural world to ransack. Peasants today are what we call subsistence farmers. “Subsistence farming continues today in large parts of rural Africa, and parts of Asia and Latin America.” – (Wikipedia). There are, on some measures, still 2 billion subsistence farmers left in the world. At least a billion of these are in the Indian sub-continent and China combined. Given the recent revolutions in robotic production there now seems little to no chance that all these remaining subsistence farmers (a reserve labour army of 2 billion) will ever need to be drawn into capitalism. That is to say capitalism will always be able to maintain a huge global reserve army of the unemployed and the marginally self-subsisting with which to discipline workers and with which to make gains for capital via labour arbitrage.

    It may even be that gains via labour arbitrage could be maintained indefinitely by running an endless system of rolling crises and impoverishment around the globe. When a nation or region becomes too affluent (in the eyes of the metropole capitalist oligarchs) and thus demands wages which are too high, the technique will be to move production to another currently impoverished area and progressively impoverish the existing more advanced area. On the downswing this “existing more advanced area” (let us call it Europe or USA or Australia) is enabled to maintain an artificial level of aggregate demand not supported by diminishing wages but supported by lending. This enables it to take the imports of the newly industrialising regions. When each “existing more advanced area” has served its purpose it is then progressively trashed and rendered down into a backward area while an existing backward area which will in turn accept very low wages is employed for capitalist production. The newly rich region or country, say China, will eventually have its wages disciplined in turn in a similar manner. This very late stage capitalist dynamic (of endless engineered rolling crises) might not assume so much a national character as “metropole / hinterland” character.

    In the above scenario, revolutions will also assume an ever-changing and patchy “hinterland” and “backwater” character and be unable to effect changes against the metropoles of power with their stranglehold control on technologically advanced security and military power (the oppressive apparatus).

    Only in capitalism’s attack on nature is there any clear hint of a limit to this process. It is perhaps not raw resource limits which will impose the limits but rather the bio-service systems of the bio-sphere which will impose the limits on capitalism. In this analysis, climate change, species extinctions, death of the oceans and other ecological crises, will generate the only realistic catalysts and grounds for widespread revolutionary change. Then the oppressed and marginalised hinterlands and the metropole middle classes (bureaucrats, technocrats, managers, security and military personnel) will all realise that the capitalist oligarch system is destroying the planet and thus the basis for the lives of the 99%. At that point the peasants, subsistence farmers, bureaucrats, technocrats, managers, security and military personnel could all realise they are essentially in the same boat and on the same side. That could be an “interesting” time for the 1%.

  13. @Ikonoclast
    In ayurvedic medicine, it is not uncommon for practitioners to make statements like “the pulse of the liver is too ‘subtle’ to be detected by scientific instruments, and can only be detected by the hands of a skilled ayurvedic doctor” and “a ‘subtle’ reading of the Rig Veda reveals that it contains a complete description of quantum physics”.

    Is that what you meant by ‘subtle’? 😉

  14. @Tim Macknay

    LOL. However, it doesn’t take a subtle reading of Marx and Engels to note that they did understand (in 19th C scientific, philosophical and economic terms) the interacting nature of the political economy and the natural world. To propose otherwise is to be ideologically biased or unread in the totality of their thought.

    “Even a whole society, a nation, or even all simultaneously existing societies taken together, are not the owners of the globe. They are only its possessors, its usufructuaries, and, like boni patres familias, they must hand it down to succeeding generations in an improved condition.” – Marx / Engels, Capital Vol. III Part VI, Chapter 46. Building Site Rent. Rent in Mining. Price of Land.

    “As individual capitalists are engaged in production and exchange for the sake of the immediate profit, only the nearest, most immediate results must first be taken into account.

    “As long as the individual manufacturer or merchant sells a manufactured or purchased commodity with the usual coveted profit, he is satisfied and does not concern himself with what afterwards becomes of the commodity and its purchasers.

    “The same thing applies to the natural effects of the same actions.” – Engels.

    “… all progress in increasing the fertility of the soil for a given time is a progress towards ruining the more long-lasting sources of that fertility. The more a country starts its development on the foundations of modern industry, like the United States, for example, the more rapid is this process of destruction.

    “Capitalist production, therefore, develops technology, and the combining together of various processes into a social whole, only by sapping the original sources of all wealth-the soil and the labourer.” – Marx, Capital, Volume I, Chapter 15

    “The development of civilisation and industry in general has always shown itself so active in the destruction of forests that everything that has been done for their conservation and production is completely insignificant in comparison” – Marx

    “The development of civilisation and industry in general has always shown itself so active in the destruction of forests that everything that has been done for their conservation and production is completely insignificant in comparison”, – Marx.

    In London, they can find no better use for the excretion of four and a half million human beings than to contaminate the Thames with it at heavy expense.” – Marx.

    Sorry, I cannot find all references at short notice.

    It is patently clear that all these words contain explicit and clear understandings of “negative externalities” and “ecological consequences” of capitalism simply without the trappings of 20th C terminology.

  15. @Ikonoclast

    To be fair, Western academics other than those who have sold out to corporate capital have very little power. All they CAN do is convene talkfests and issue petitions, statements and open letters. The capitalist system marginalises all critics. It is part of how it works. Andrew Bolt is more influential than all Australian academic economists (and climatologists for that matter) put together.

    I disagree. Andrew Bolt is a piece of cultural flotsam. He doesn’t influence much at all. He is carried along by a current the dynamics of which he neither understands nor cares about for as long as he isn’t dragged under by it. Bolt has the ‘influence’ that comes with the licence given him by Murdoch, and Murdoch has power because the main actors in Australian politics grant it to him rather than seek roots in the respect of the populace, which would put them at odds with the oligarchic rule from which they expect to derive their longterm privileges. It’s a complex game they are playing to live on the backs of others.

    As to academics more broadly, there’s a dialog between them and the elites and because the elites themselves having differing opinions about what their immediate interests are and how best they can be served, the academics (whether you or I regard them as paid up servants of corporate power or not) have, to the extent of the tension within and between fractions of the elite, a certain amount of influence. That it is typically quite different from the kind of influence those of us who favour equity and inclusion would like is a quite different matter.

  16. Ugh …

    … because the elites themselves having {have} differing opinions about what their immediate interests …

  17. Call for an ambitious and credible climate agreement in Paris
    Climate negotiations at the United Nations have not substantively addressed the root cause of climate change from an economic perspective.
    The climate is a planetary public good shared by all. Every ton of CO2eq (CO2 and other greenhouse gases) released destroys that resource in equal measure. A transition to low carbon economy requires policies that put a price on carbon, so that economic actors account for the damage to the climate from their emissions. If the Paris summit is to take any convincing action against the consequences of climate change, it has to build a cooperative structure with strong economic incentives, based on three principles:
    Principle 1
    All nations should ultimately face the same CO2eq price
    Principle 2
    Carbon pricing must incentivize universal participation
    Principle 3
    “Free-rider” behavior has to be hindered
    The immense challenge of the COP-21 is to build a cooperative framework that is attractive to as many countries as possible. This framework’s credibility depends on designing economic incentives that have a global impact. The economists who have signed this call wish to map out feasible solutions by presenting public policy-makers with this shared assessment of the causes behind current obstacles faced by the negotiation.

    I note you didnt reproduce the ‘Economists Call’ John. I am surprised Ikonoclast didnt comment on its pretty grotesque anthropocentrism (Maybe this reflects living in Paris which is my favorite city bar none but which is utterly tamed). With this in mind I offer a challenge – perhaps for when COP21 dissolves in a mess like Copehagen or over time as its resolutions are shown as hot air – like that 100 billion a year third world fund which everyone has forgotten.

    Returning to the Call. Sentence 1 …. absolute agree. But then the call/manifesto generates into a document a management speak expert would be proud of. Sorry. With this in mind might I suggest a revision something along the following lines – reflecting long standing complaint about economics but still I suggest worth recycling:

    “The Climate is not a mere economic good to be exploited by human beings and traded by Wall St or governments as though it was just an animal carcass being parcelled out on the butcher’s floor. Every time we frame the climate as a ‘resource’ we belittle its inherent complexity beauty and inherent environmental value, which has nothing to do with simian trading behaviour, and the natural environment which created it and depends on it. Even the Pope understands this problem whic requires a change in both environmental economics and the mindsets and models of our profession.

    A transition to a steady state world economy is required which quarantines at least half the world as wilderness and without which a ‘low carbon’ one is merely a temporary sop for those who still see infinite growth/business as usual as some universal law. Regarding economic systems we now recognise after 20 years working on even this simple problem that carbon pricing is both a nonsense device as well as a total failure to judge by the lack of progress and the corruption of economics generally confirmed by GFC-2008 and the current Troika behaviour. So an economic revolution is needed most likely moving ecological economics from its pariah status to the central cornerstone of human relations with one another and the natural world with current dominant neoclassical and Keynesian paradigms subservient to it. If the Paris summit is to take any convincing action against the consequences of uncontrolled market driven economic growth we have to aid a cooperative structure – based on three Principles:

    Principle 1
    All nations must stop deluding themselves, based on our advice, that infinite economic growth is possible or desirable as the means for addressing social inequity.

    Principle 2
    Economics, management, the law and government must cease their obfuscation that this is not an existential crisis reflected in the use management oxymorons/policy in vaguely defined fasion meaning all things to all people – like ‘sustainability’, ‘incentivize’, ‘adaptation’, ‘feasbinble’, ‘Green Growth’, ‘Corporate social responsibility’, ‘circular economy’ etc. and admit that the anthropocentric methods labelled as mainstream economics of the past 300 years have reached their use by date.

    Principle 3
    We as economists have been free riding on the global environmental crisis we took credit for creating (the post war boom), and then perversely claimed to have the solution in order to maintain our priveleged policy status. This must stop.

    When COP-21 fails, as it is likely due to do by its narrow framing, and has happenned repeatedly in the past, we will at this time tender our humblest apologies for providing the intellectual basis for stuffing up the planet for so long and then compounding the mess with this deadend solution. Then we will work with whatever revised approach can be developed which starts with the recognition that humans are dependent on nature and not vice versa.

  18. @Ikonoclast
    Accepting that Karl did have lots of great insights it doesnt follow that he was a greenie as a lot of the green left would these days like to suggest.

    This is a bit like the unfortunate hoops the Pope has just been through trying to caste his predecessors as motherhood and apple pie environmentalists when history shows they were clueless. Its one of the sad deficiencies in a generally much to be welcomed document. Still better than nothing.

    At best Marx was a ‘resourcist’ and certainly my memories and continued experience of the older generation of the socialist left including many continuing friends is that they are ecologically still clueless despite my years of haranging.

    Separately and maybe perversely early environmentalism was promoted by the European nobility and dreaded US capitalists. WWF and IUCN were established with lots of help like it or not by the Royals. Meanwhile in the US Teddy R established Yellowstone at the point of a gun – with a military fort to protect it – Fort Yellowstone. Now that’s direct action.

    The point here is as insightful as Karl was he really doesnt have much to offer much more than sporadic environmental concerns directly, though his analysis of how capitalism works is still damned useful to understanding why the use of economic instruments is to me a dead end.

  19. @Ikonoclast

    it doesn’t take a subtle reading of Marx and Engels to note that they did understand (in 19th C scientific, philosophical and economic terms) the interacting nature of the political economy and the natural world. To propose otherwise is to be ideologically biased or unread in the totality of their thought.

    Not wanting to propose otherwise, just suggesting that your original quote was a bit too vague and metaphorical to readily convey the concept of a negative externality. Some of the additional quotes you’ve provided are a lot closer to it, I think. AFAIK, externalities aren’t always connected with the natural environment, although the most commonly discussed ones are.

  20. Memory lane! For the world as a whole, the free rider problem is history. Aggressive mitigation has (dixit the IPCC) negligible net GDP costs. That’s ignoring GDP co-benefits like health, and the cost data are now two years out of date, so most countries will benefit economically from a rapid energy transition. The free-rider problem has been solved by engineers.

    That leaves the possibility of a few local free-riders: Saudi Arabia, Australia, Canada. By all means let’s be horrid to them. But for Australia, it looks as if the freeriding is coming unstuck courtesy of Chinese coal policy, and we are already watching the Galilee project implode.

  21. @Tim Macknay

    “.. externalities aren’t always connected with the natural environment, although the most commonly discussed ones are.”

    That’s an interesting comment. I would have to try to “thought-experiment” various possibilties right through. (If I may use “thought-experiment” as a verb.)

    It seems to me at first thought that all or most negative externalities would have to be naturally mediated or naturally transported and to involve either the natural environment or the built environment. We tend to emit our negative externalities without personal cost when (like our farts) this can be accomplished stealthily and the unpleasant effects can be left to waft off or flow away to bother someone else.

  22. @Ikonoclast
    By “not connected with the natural environment”, I meant that they are not always associated with pollution of, or damage to, the natural environment. Obviously anything we do is “connected with the natural environment” in some sense, but that is not what I was getting at.

    One example that springs to mind is that a negative externality of car sales is increased traffic congestion, which leads to increased commuting times for other road users. Obviously that externality is “naturally mediated or transported” but it does not involve any degradation of the natural environment, per se. (Equally obviously, the sale of cars has other externalities that are connected to the natural environment in the sense I intended, however increased congestion does not).

    I hope that clarifies what I meant.

  23. We have a climate change policy in place: we call it Direct Action, knowing it to be a false hope and an expensive one at that. We have a policy of no carbon price through market-based pricing of carbon emission credits, and of no “tax”. When it comes to the next round of negotiations, our policy is to be the wrecking ball, a proxy for Canada and for the Republicans in USA. We did a great job on Kyoto, even as we pretended to be making the reductions required (which in Australia’s case was a mere trimming of the rate of growth of GHG emissions, rather than an outright reduction).

    With a number of the ministers back in play, Andrew Robb being one of the crew, I think we could do a fairly good nobbling of any attempt at a new global agreement. If a knee-capping and a nobbling are required, LNP is the crew to do.

    Sadly we are stuck with ’em for a while yet.

  24. @Newtownian
    Instead of haranguing the Professor, why not promulgate your own public statement? You can call it the “Sanctimonious Deep Green Luddite Curmudgeons’ Call for Climate Inaction and Self-Flagellation”.

  25. @Fran Barlow

    I completely agree as you say that “Bolt has the ‘influence’ that comes with the licence given him by Murdoch, and Murdoch has power because the main actors in Australian politics grant it to him rather than seek roots in the respect of the populace, which would put them at odds with the oligarchic rule from which they expect to derive their longterm privileges. It’s a complex game they are playing to live on the backs of others.”

    I did not mean to imply that Bolt had any influence or qualities separate from what you mention above. He clearly has no intellectual, scientific or moral basis or standing in any of his public pronouncements and arguments. His only presentation qualities as such in the public arena are opportunism, over-simplification, an unctuous and facile smoothness and finally an amoral lightning rod ability to rabble-rouse in a populist fashion and appeal to deep-seated prejudices.

    As to Australian academics, I did not mean to imply that most have sold out to capitalism. The reverse is the case. The very fact that they remain in universities indicates they have not sold out. They might intellectually “buy” into some of the capitalist ideology in some cases. The intellectuals who have sold out have gone over to the corporate and oligarchic business interests who pay their salaries. The US case is a bit different. There are some well-endowed schools in Universities which are staffed by sell-outs to corporate and oligarchic capital. I will not name names.

  26. A transition to low carbon economy requires policies that put a price on carbon, so that economic actors account for the damage to the climate from their emissions.

    The whole “price on carbon” thing seems to set the parameters of discussion too narrowly.

    A transition to a low carbon world (within the very short time the science tells us we have to attempt it) requires massively reducing emissions.

    If the economy has an issue with that then the economy will just have to change or adapt or otherwise get out of the way.

    I tend to agree with Newtonian’s comment. If “economics” made the whole mess in the first place, then it seems odd to place it at the centre of finding a solution.

  27. @Megan
    It’s not really clear to me how the “whole mess” can be laid at the feet of economists, other than as a rather dubious rhetorical posture.

    I agree with your fundamental point though, that the transition requires a massive reduction in emissions; nothing else will do. I don’t think the proposed “Economist’s Call” is inconsistent with that, although it’s obviously not the whole picture – it’s an economists’ contribution.

  28. Ikonoclast :
    @Tim Macknay
    “.. externalities aren’t always connected with the natural environment, although the most commonly discussed ones are.”
    That’s an interesting comment. I would have to try to “thought-experiment” various possibilties right through. (If I may use “thought-experiment” as a verb.)
    It seems to me at first thought that all or most negative externalities would have to be naturally mediated or naturally transported and to involve either the natural environment or the built environment. We tend to emit our negative externalities without personal cost when (like our farts) this can be accomplished stealthily and the unpleasant effects can be left to waft off or flow away to bother someone else.

    I have elsewhere suggested that unemployment is furthered by an externality for which I have suggested a Pigovian solution, at least in the post-mediaeval western world and other areas that follow that pattern. With unemployment benefits funded the way they are, i.e. without that Pigovian adjustment, employers don’t face the spread/spilled over costs of retrenchment; that is a “built environment” thing, broadly understood. However, that is an approach to dealing with the “Vagrancy Costs” that come up when there isn’t a support system like that in place (hence the Elizabethan Poor Laws to cope with the endemic poverty that emerged from a combination of the peace dividend from the end of the Wars of the Roses, the first phase of the English Enclosures of the Commons to raise sheep, and the growing export market for wool that came from improved trade conditions); these Vagrancy Costs were also spread/spilled over, and are a “natural environment” thing, broadly understood. Neither of those are matters of free riding damage to the environment as that is usually understood.

  29. @Tim Macknay

    Not “economists”, “economics”. The difference being that the people are distinct from the prevailing ideology as it has actually functioned to give us the situation we have.

    The idea that a “price” must be central reminds me of that saying about only having a hammer and consequently all problems looking like nails.

  30. @Megan
    Well, Newtownian’s comment reads to me as if it’s demanding a mea culpa From the economists themselves. But mark me down as skeptical that ‘economics’ aka ideology can be given primary responsibility for the mess. It’s an aspect of it, sure, but not nessary the most significant one, IMHO.

  31. Ivor @1 and maybe some others. Tradeable quotas imply a common price, with no need to specify a particular currency. I think the statement is intended to be neutral as between a global emissions trading scheme and co-ordinated carbon tax measures

  32. The “price” fixation is an issue, in my view, because it seems to preclude the type of action that has been pretty successful on the ozone hole.

    With ozone it was an agreement to quite quickly phase out the ODCs as well as strict sanctions against countries that didn’t.

    Only something like the worst 20 ODC countries originally signed up, but it appears to have averted the worst of the crisis and the ozone layer is slowly replenishing.

    That was only about 25 years ago, but the ascendancy of neo-liberal economics/ideology since that time (not to mention the total corruption of our political class) looks like it could prevent something similar for climate change.

  33. Off thread. Solar Impulse 2 has made it from Nagoya to Hawaii in 5 days of non-stop solar powered flying. Landing in 2 hours. Historic! www (dot) solarimpulse (dot) com

    For all my pessimism of the world, I am heartened by the all good things we manage to achieve.

  34. Also, I believe Tesla type power walls will be available in Australia next year. This could see solar head off into grid free territory, as much as that is possible as existing connections are not able to disconnect.

  35. @plaasmatron

    The electric powered and hybrid aircraft BilB has been talking about are the ones I would be willing to fly in once full testing and proving is done. Direct solar powered craft will always be too light and flimsy and carry too little payload. There might however be niche applications at a smaller built scale carrying payloads of only a few kilograms.

  36. That is also great news, Rog. Keep in mind it is best to not plan to run an upright electric stove off a Power Wall. The powerwall spec points out a 2kw continuous drain with a 3.5 kw peak. That is just enough to run the kettle and the toaster at the same time, but the fridge will have to wait. So an electric upright stove which can pull 7.5 kw is not suitable for the dolar package without an electronic demand controller. There is a fix to allow high surge demand from electric motors which can pull 6 times their running current and that is a companion regular truck battery in the system to handle “cranking” demand.

    Most people are smart enough to realise these things and make the changes. In my factory I am finally getting rid of the mercury vapour lamps which pull 2.8 kw (and are very noisy) when they are all on. The LED replacements will pull a total 200 watts with a better light coverage (and silent). A power wall will work very well for small business too acting a an uninteruptible pwer supply for the computers, lighting and refrigerators, recharge by PV solar or off peak power.

    Mr Tesla reincarnate has proven yet again that he is a clever man.

  37. Before you write off pure solar Ikonoclast look at the link to the Raymond’s quite spectacular Sunseeker Duo. This is a spacious and comfortable 2 seater which takes off and flies on solar power with up t a 12 hour flight duration. It does have a very large wing span, however its solar panels are 20% efficient. When Spectrolab’s 40% efficient panels are available in that form then you can double the payload and or reduce the wingspan. Furthermore there are a lot of experiments underway with many small electric motors deployed along the span of the wing and with a special motor at the wingtips to minimise the wing tip drag. This arrangement increases efficiency and lift for very short takeoffs. With Samsung’s rumoured battery storage density likely halving the weight of the storage batteries, the payload increases again.

    There is no commercial solar powered aircraft on the horizon, or likely, but the Sunseeker Duo proves the viability of solar powered flight. Is it a useful technology? Think in terms of spotting aircraft for traffic management, police surveylance, agricultural functions, fire watch, tourism, etc, ….that cost nothing in fuel to stay aloft ($1200 per hour for a bell ranger helicopter or $200 per hour for a Cessna). Will such aircraft be commercial? Without a doubt.

  38. BillB you are now saying Powerwalls should be regarded as blackout backup for low power applications. Yet in these pages a few months ago they were supposed to run air conditioners, heaters and cookers until late at night, every night. My solar feed-in tariff expires in 2019 and those could be some of the things I want to do with batteries. It’s back to my other solution of nationalising the electricity industry to keep power prices down.

  39. The CEO of Tesla, Elon Musk, has stated that the 7 kilowatt-hour Powerwall will have its output improved so it can provide 5 kilowatts of continuous power and 7 kilowatts peak. The Powerwall will not enable people to save money by going off grid but it can be a superior option to lead-acid batteries for off-grid applications thanks to its 10 year warranty and minimal maintenance operation. As a result of Australia’s low solar feed-in tariffs, the Powerwall can be a profitable investment when used for on-grid energy storage by households on time of use tariffs with high electricity consumption during peak periods in NSW, WA, SA, and potentially QLD.

  40. Hermit your powers of comprehension are clearly extremely limited. Go back and read carefully what was written. Solar airconditioing runs off HEAT energy, not electrical energy (electrical energy is required for air circulation fans though).

    You are becoming less credible by the day, Hermit. You claimed in the past to have been off the grid well before feed in tariffs were introduced. At one stage you were suggesting that you worked for a company that manufactured inverter like products. I think that your connection with renewable technologies is entirely “illustrative”, and that is OK, this is a forum for thought, looking at the past and “test running” the future in simulation fashion.

    So in that vein looking at your “final solution”, I think that one is slipping away as a possibility with NSW setting up a 99 year leasing of their electricity assets, and the trade agreements that idiot Abbott is signing would eliminate any benefit otherwise via the Investor State Dispute clauses. High power prices are locked in.

  41. I did not know that, Ronald B. Ignore what I wrote, other than it still being the best solution to use gas for cooking.

  42. I wish we had a crystal ball to know what those TOU tariffs will be a decade from now. It is quite conceivable that the powercos will get obliging price regulators to see things their way. For example increasing the daily fixed change from around $1 to $2 or more. If we still have preset peak and offpeak the spread could be compressed. The biggest current peak-offpeak spread I found was 24c per kwh that could be squashed to say under 10c. There could also be other imposts like a Spanish style solar tax.

    Therefore those who get a Powerwall are making a leap of faith. I’d like them to report back after a year or two to see how it worked out, not only cost wise but with reliability and safety. At present I regard the energy storage problem as not solved.

  43. @BilB

    I did say niche applications were a chance. Maybe the niche application will be bigger models than I anticipated but still niche. There is nothing wrong with “niche”. Every little bit helps and this indeed will be the way an almost fully electric economy will work. There will be many micro and niche applications along with bigger applications. Lots of micro can add up to a sizeable chunk of our total needs.

    I foresee a time when almost all cars are electric. They will plug in almost anywhere for recharging; at home, at work and in car parks for trickle charging along with charge stations for rapid charges. In addition, these cars will be covered in a solar pV skin including windows and will thus always trickle charge from the sun as well. With this system your car can be any colour so long as it’s black. 😉

    I foresee a time when all house roof sheeting and even building windows are solar pV skinned. We will have so much electrical power we almost won’t know what to do with it. I am strongly looking forward to the almost complete general demise of the IC engine. I hate IC engines. They are dirty, noisy, costly, polluting, hard to maintain and have very inconvenient torque and power profiles. They are so yesterday it’s not funny. Our urban environments will be immensely cleaner, quieter and more aesthetically pleasing when IC engines are gone and all land transport is electric (including more mass transit and rail freight).

    The point about an electrical economy is that it is just so much more efficient. We can two or three times as much with the same total energy use.

  44. I think Ikonoclast that

    “We will have so much electrical power we almost won’t know what to do with it” is a safe prediction, and

    “The point about an electrical economy is that it is just so much more efficient. We can two or three times as much with the same total energy use”

    is a refreshing thing to hear someone else say. I concur completely. And…

    “Lots of micro can add up to a sizeable chunk of our total needs”

    is my vision of the future, were everyone is self employed, and a capitalist to boot. It does not take a lot of capital to be self employed for life, and with today’s spectacular enabling technology of the internet this is ever more true.

    I use Android phones and tablets so I am going to list some of the Apps that really make small business easy

    Email ___ of course but googles new “Inbox” is working for me.
    Chrome ___ for browsing is awesome.
    Route 66 ___ for navigation is very good but I am happy to try another.
    Calcularis ___ is my preferred calculator. I would prefer to have Lotus 123 in mobile form though.
    Sailforms Pro ___ is the hub of my business. This a full relational database application that anyone can use. This package allows a professional accounting package to be programmed and run from a phone or tablet.
    Cam Scanner full version ___ is an awesome document scanner (where the phone camera has sufficient resolution)
    DirectOffice Print ___ performs most printing tasks straight from my phone to my WiFi printer
    ES File Explorer ___gives easy access to the full file system, and more.
    CommBank app ___is awesome (they all have them now)
    Qantas the App___ is really useful when I ignore my Carbon responsibilities and travel for business
    Time Buddy ___makes it easy to keep track of lots of timezones
    ArtFlow ___ is a package that I am using on Samsung Tablet for concept design work (when there is no paper around) . It has page export limitations so I take a photo of the result and mail it to myself.
    Viber ___ my business partner demanded that we use this app, but it works extremely well in all modes. I used it a while ago when in a shop Prague for my wife to pick out some things she wanted via the video function (as good as Skype).
    Open Office (Sun Systems) ___ is now available but not full capable just yet. De glitching is moving rapidly.
    Google earth, Google Maps, the ABC app, Flight Radar 24, TripView, Transport Info, and WeatherZone are all essential accessories.

    I’d love to hear about anyone elses App preferences that make their business or work easier.

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