Hard cash and climate change: repost from 2005

While thinking about decarbonizing transport, I dug out this old post from 2005. It’s interesting to see how the debate has evolved (or not) since then.

The big change has been that the prospects for technological alternatives like alternative energy sources and electric vehicles have improved dramatically. As regards transport, I don’t see much reason to change the analysis I presented in 2005. Unfortunately, while some progress has been made along the kinds of lines I suggested, it’s been very limited compared to the radical changes in electricity generation. So, we are only at the beginning of the process of decarbonizing transport.

Tim Worstall gets us past that pesky NYT paywall to link approvingly to a John Tierney column arguing that the way to encourage energy conservation in the US is not to fiddle with standards but to raise prices. Broadly speaking I agree. At a minimum, getting prices right is a necessary condition for an adjustment to sustainable levels of energy use. Nevertheless, the rate of adjustment and the smoothness with which adjustment takes place can be greatly enhanced by the adoption of consistent pro-conservation policies, or retarded by the adoption of inconsistent and incoherent policies.

This is as good a time as any to restate the point that, given a gradual adjustment, very large reductions in energy use and CO2 emissions can be achieved at very modest cost. Rather than argue from welfare economics this time, I’ve looked at the kind of adjustments that would be needed to cut CO2 emissions from motor vehicle use (one of the least responsive) and argued that price increases would bring this about over time, without significant pain.

With the price of gasoline in the US passing $3/gallon and most of the remaining sceptics now conceding the reality of human-caused climate change, it seems like a good idea to re-examine some fundamental assumptions in the debate over climate change. Rather than focus on the short-run arguments about the Kyoto protocol, it seems more useful to focus on the question of whether anything can really be done to stop climate change.

A common estimate is that to stabilise the global climate, we would need to reduce emissions of carbon dioxide by 60 per cent, and proposals to achieve this by 2050 have been put forward. Assuming only a limited role for alternative energy sources, it seems reasonably to look at a 50 per cent reduction in primary energy use.

It’s a widely-held view that the kinds of changes required to stabilise the global climate must imply a fairly radical reduction in our material standard of living. This view is shared by radical environmentalists, who see such a reduction as a good thing, and by opponents of such changes most of whom, at least in developed countries are on the free-market right.

The fact that radical environmentalists view the modern economy as critically dependent on unsustainable patterns of energy use is not surprising. On the other hand, supporters of the free-market generally praise the flexibility of dynamism. Currently, energy use accounts for about 6 per cent of GDP. The suggestion that reducing this proportion to, say, 3 per cent, is beyond our capacity seems to represent a very pessimistic view of our economic potential.

There’s a standard economic technique for giving a rough estimate of the economic cost of such a shift. Begin with the assumption that in the long run, the demand for energy is sufficiently flexible that a 10 per cent increase in costs will eventually produce a 10 per cent reduction is usage, relative to the underlying trend. Although energy use responds slowly to price changes in the short run this is a fairly conservative estimate of price responsiveness over periods of a decade or more.

Given this assumption, halving energy use would require a 100 per cent increase in prices (by coincidence this is about the change that’s been seen in US gasoline prices in the last few years). A standard economic calculation suggests that the reduction in economic welfare associated with such a tax would be somewhere between 50 and 100 per cent of the revenue raised, or between 1.5 per cent and 3 per cent of GDP. That’s about one year’s worth of economic growth. Remember that this estimate is not for the modest first steps required under Kyoto, but for a reduction in emissions on the scale required to stabilise climate.

Is such a broad-brush estimate reasonable? One way to check is to look in detail at the kinds of changes that would be needed to achieve such a reduction in the most sensitive single category of energy use, that of private motor vehicles.

Consider changes over twenty years, a period long enough for the vehicle fleet to turn over, and for people and firm to make adjustments to home and work locations, commuting and shopping patterns, and so on.

First, a significant reduction could be achieved simply by improvements in the technical efficiency of fuel use. The motor vehicle industry, although technologically mature, still exhibits steady improvements in the efficiency of engines and other aspects of vehicle design. When fuel prices are low, much of the effort is allocated to improving performance.

When fuel prices are high, and policy is oriented towards reducing energy use, innovations that improve fuel economy are favoured. Over 20 years, and with support from publicly funded research, it seems reasonable to anticipate a 20 per cent improvement in fuel economy, for all types of vehicles, relative to the ‘business as usual’ trend.

Second, some shift towards alternative fuels could be anticipated. While radical alternatives such as ethanol and hydrogen and alternatives to internal combustion such as electric cars have so far proved disappointing, an increase in the effective cost of petrol would encourage greater use of existing alternatives such as LPG and diesel, which are more efficient in terms of carbon emission.

Yet further improvements could be achieved with measures to reduce traffic congestion, including purely technical innovations such as more sophisticated management of traffic lights and market innovations such as congestion charges.

Next, the mix of vehicles in the fleet would change over time. The gain from this source can be illustrated by a simplified example. Suppose that half of fleet uses 10l/100km, and half uses 5l/100km, yielding an average of 7.5l/100km. If the proportions changed to 25:75, the average would fall to 6.25,and fuel use would fall by 15 per cent. Most of this change would arise as a result of consumer responses to changing prices. However, existing policies that favour the use of large, inefficient vehicles (such as the special treatment of SUVs in US fuel economy regulations) should be scrapped, and replaced by policies pointing in the opposite direction.

A small further saving, say 5 per cent, could be achieved through discretionary decisions on which vehicle to use for a given trip. Given high fuel prices, a household with a small car and a 4WD might be more inclined to use the small car when dropping the kids off at school, for example.

A similar small change, say a 5 per cent reduction in fuel use, could be achieved through improved driving habits. These include stricter adherence to speed limits on open roads, and avoiding excessive acceleration and braking in urban areas.

So far, we’ve considered changes which involve no change at all in travel patterns (with the exception of congestion pricing, which would actually improve things), and only marginal adjustments in lifestyle. The biggest single change, in the fleet mix, would do little more than restore the mix prevailing in, say, 1980. Yet taken together, these changes would be sufficient to reduce energy use by between 30 and 40 per cent and CO2 emissions by an even larger amount.

Now consider some changes in travel patterns. The most important single variable is the distance travelled by each person. To get an idea of feasible magnitudes let’s consider a 20 per cent reduction in distance travelled. For commuting, the biggest single use of time, this could be achieved if people chose to live a little closer to work, to rearrange schedules to allow a four-day week, or to telecommute one day each week. Similar savings could be made on shopping and leisure travel with only modest costs.

The fuel cost of travel also depends on the extent to which people share cars. The average occupancy of cars has declined steadily reaching about 1.1 persons per vehicle for commuting trips in the US in 2000, and about 1.5 persons per vehicle for all trips. A partial reversal of this trend, raising occupancy to 1.65 persons would reduce fuel use by 10 per cent for a given number of person-km travelled.

Finally, there’s public transport and alternatives to cars like bicycles and walking. Doubling the share of these would reduce the number of vehicle trips by around 10 per cent, though the reduction in fuel use would be smaller since mostly short trips would be avoided.

Adding all of these modest changes together would yield a reduction in fuel use of more than 50 per cent Some of these changes would be imperceptible, others would require marginal adjustments over a couple of decades. Taken all together, they would be barely noticeable relative to the changes in lifestyle that most people experience over such a period.

You might think that adding together a whole lot of small changes in the same direction is stacking the deck in some sense. But this is the way markets work. An increase in the effective cost of some commodity generates adjustments on many different margins, all in the direction of economising on that commodity.

It is also the way coherent public policy works. If a goal of reducing energy use or CO2 emissions is properly embedded in public policy, it will be reflected in modest shifts in many different dimensions of policy, producing a significant aggregate impact.

The combination of price responsiveness and public policy can be seen working together in the reduction in tobacco use over the forty-odd years since the link between smoking and cancer was first officially recognised in the US in the Surgeon-General’s report of 1964. At the time, the proportion of men who smoked was 52 per cent and smoking among women was rising rapidly as older social taboos lost their effect. In 2000 the proportion who smoked was down to 25 per cent for men, and 20 per cent for women and was declining for both groups.

Admittedly, the health risks of smoking are borne mainly by the smoker, so the link between giving up and receiving benefits is direct and personal. Against this, nicotine is possibly the most addictive drug known to humanity. Giving up smoking requires an effort far greater than the modest changes discussed above.

The reduction in smoking was achieved by a combination of higher taxes, aggressive public information campaigns and public policies that gradually limited smoking in various public places, but without any radical changes or any element of compulsion comparable to Prohibition of alcohol or of the many drugs that are currently illegal.

What is true for driving and smoking is even more so for other forms of energy use, particularly in business and industry. Given a consistent upward trend in prices and a coherent set of public policies, massive reductions in energy use would follow as surely as night follows day.

142 thoughts on “Hard cash and climate change: repost from 2005

  1. @Val

    Don’t use the “Reply” function directly as it introduces a link if you want to include some other link.

    You may think you have only used one – but in fact there are two.

  2. @Val

    I am not a pessimist, I am a scientist. Scientists reporting future El Nino or lower rain fall are not pissimists.

    Science says that global warming has occurred throughout the last 100 years and earlier.

    This means that the quantity of GHG emissions 100 years ago was unsustainable.

    Science says we have to get below this level.

    We are only noticing global warming induced weather events now because warming over time is an exponential tendency. In other words it commenced so far back in the past and at such small initial levels we probably will be unable to discover when.

    If there is any evidence that there was no global warming 100 years ago, then when did it start?

    Here is the scientific proof …

    Google – “global warming graph last 100 years”

    The changes required to get to a sustainable rate of GHG emissions are impossible – so much so that policy makers will not even contemplate them.

  3. The changes required to get to a sustainable rate of GHG emissions are impossible – so much so that policy makers will not even contemplate them.

    Not correct. Zero is a sustainable rate of GHG emissions, and policymakers have agreed to reach that level by the end of the 21st century. They’ve also agreed that they will reduce emissions to a level consistent with stabilization at or below 450 ppm. And, I’ve demonstrated at tiresome length, beginning with the 2005 post cited above, that the required changes are not only possible but can be delivered at an economic cost that is small on any reasonable measure.

    There are all sorts of counterpoints you can make about whether these goals are ambitious enough, whether commitments will be implemented and so on. But merely asserting “it’s impossible” ceased to be credible some time ago.

    http://www.theguardian.com/world/2015/jun/08/g7-leaders-agree-phase-out-fossil-fuel-use-end-of-century

  4. Thanks John, Interesting post which I partly agree and partly disagree with.

    In regard to agreement I think you are certainly correct about the improvements and that we could easily achieve a zero carbon economy over the long term even with current technologies, there being so much waste.

    However I do have a number of bones about 2 economics related issues.

    1. You stop at 2050 and indicate job well done if we get to that point beyond which all will be well? But my reading of the 450-550 ppm scenarios put out by the IPCC some years back (2008?) indicated we then needed to move in the 2050-2100 period to something approaching a zero emissions economy requiring presumably yet another carbon reduction revolution. Off the top of my head they indicated we needed an emissions world of 0.2 tonnes C/person/year as against the current Australian average of around 8 tonnes C/person/year……a 97.5% reduction in our case as against the interim 60% reduction target.

    Now there is a rule of thumb in environmental management that you do the cheap easy stuff first. So for me that is what you are focusing on while overlooking the need to start addressing the much harder stage now as well. In part the problem is technological but there is also the equity problem indicated by the above – and which is still vexing negotiations which Paris didnt address beyond a non binding aspirational MOU.

    The emissions reduction is made even more challenging by the problem of population growth to 10 billion give or take, with most being product consuming adults if we actually do get to a steady state – or worse if medical science achieves extension of active life as its busy trying to do so that most people have consumption patterns of 20-40 year olds.

    Now post 2050 is of course another country but its not far in the future anymore. So its interesting to wonder about what the solutions might be to such probelms that are emerging for the next stage in climate change reduction and whether economics is helping this or constraining the latter.

    Going back to 1980 I can remember most of what we have today like PV being well under development almost to commercial levels. But where/what are the next breakthroughs? I can think of three of but they are all constrained:
    – Computer modelling at a level that pushes manufacturing boundaries e.g. 40% efficient PV (but in the end PV is thermodynamically constrained so this may be the limit).
    – Alternative concretes made of waste or carbon fibre (The only trouble is you need waste which we are trying to eliminate).
    – Environmental sanity becomes a global ethos with Paul Ehlich and the LtG mob replacing those faces on Mount Rushmore (was that a flying pig I just saw go past my window?).

    But centrally 2050 is only the beginning not the end of this story and not one we can trust economics to consider when its vision horizon is about 6 months.

    2. Post 2050 with more potent technology, greater wealth per head, greater efficiency + more people, the earth’s biosphere capacity and sustainability will be pushed more and more to its limits. We dont know exactly which the critical ones will be in the end and whether the key limits are material recycling capacity, raw mineral extraction emergy etc.

    This isnt the palce to argue about which limits are pivotal but rather simply point out that we will be closer to those limits even if we arent there now. What say you? You are sceptical about the LtG details which is fair enough given we are still here despite some fears in the 1970s. But this still begs again the question of exactly where the limits of economic growth lies.

    Or will this brave new world have decoupled us from economic material growth??? Judging by the Australian penchant for gross 4WDs and assuming we are just representative of human acquistiveness potential unleashed by pursuing endless growth economics. Though estimating this limit must be speculative there is a nice study in ecological economics which indicates energy use of about 13 kW/person or about 8 X current energy use.

    This is relevant to the present article as even with a 60% decrease in per capita energy demand, such growth if translated into oil and gas demands would negate the gains achieved through eliminating coal.

    (and note this is prior to household robots and their explosive material and energy demands speculated on by old Issac Asimov)

  5. @Newtownian

    Off the top of my head they indicated we needed an emissions world of 0.2 tonnes C/person/year as against the current Australian average of around 8 tonnes C/person/year……a 97.5% reduction in our case as against the interim 60% reduction target.

    This is my understanding as well.

    However I then add in future population growth. I use 9 billion by 2050. I also assume that if one economy can enjoy a certain standard of living that this is also the right for the rest of the world.

    John may like to criticize what he calls “counter points” but these are necessary reality checks.

    There is no point dredging up statements by G7 leaders when the submissions to COP21 are the only thing we should be looking at now.

    Even at the very earliest stages of industrialisation, initial warming was occurring even in the late 18th. This is the view of NASA scientists at:

    Sea Change

    More than zero GHG emissions is sustainable. You just have to find the quantity of flow into sinks that does not increase their saturation.

    Stabilisation at 450ppm will still permit a warming trend of around 2 C per century until CO2 levels are under (anyone’s guess but say 280).

    I am not implying here that CO2 is the only problem.

  6. @Newtownian

    Off the top of my head they indicated we needed an emissions world of 0.2 tonnes C/person/year as against the current Australian average of around 8 tonnes C/person/year……a 97.5% reduction in our case as against the interim 60% reduction target.

    This is my understanding as well.

    However I then add in future population growth. I use 9 billion by 2050. I also assume that if one economy can enjoy a certain standard of living that this is also the right for the rest of the world.

    John may like to criticize what he calls “counter points” but these are necessary reality checks.

    There is no point dredging up statements by G7 leaders when the submissions to COP21 are the only thing we should be looking at now.

    Even at the very earliest stages of industrialisation, initial warming was occurring even in the late 18th. This is the view of NASA scientists at:

    Sea Change

    More than zero GHG emissions is sustainable. You just have to find the quantity of flow into sinks that does not increase their saturation.

    Stabilisation at 450ppm will still permit a warming trend of around 2 C per century until CO2 levels are under (anyone’s guess but say 280).

    I am not implying here that CO2 is the only problem.

  7. @Newtownian

    I usually stop at 2050 because we know so little about the technological options that will be available then. As you say, it’s not as far in the future as it was, but still far enough that it seems pointless to predict which technologies will pan out. Assuming we have stopped burning fossil fuels by then (certainly feasible), there are three big issues

    (a) Methane and the other minor GHGs. Most projections assume unchanged methane emissions: given a relatively short residence time, that means stable concentrations. But we could greatly reduce methane emissions by eating chicken or pork instead of beef and lamb (or just less meat) and by changing the way we grow rice. That would imply declining concentrations over time. OTOH, if methane emissions keep growing we are in trouble.

    (b) Forests: Currently, forest clearing contributes to net CO2 emissions. If we could reverse that, and keep the carbon locked up, we’d get another big source of reductions

    (c) Direct extraction: there’s no currently demonstrated technology, but there could well be one by 2050.

    (d) Geoengineering: most existing proposals are crazy, but we might come up with something sensible in 35 years.

  8. I don’t put any of my hope in diplomatic and government efforts like COP21. Our current capitalist-captured governments, almost world-wide as far as I can see, are still mostly captive to the fossil fuel industries and their money and influence. I do put hope in disruptive technologies like solar. While we remain in the capitalist system, our main hope lies in new, renewable energy capitalists defeating old, fossil fuel capitalists. At the government level, our main hope lies in governments perceiving that renewable energy technologies will confer an economic advantage and thus a geostrategic advantage. When they see that they will get serious about it. They won’t act to save the world but they will act for economic and geostrategic advantage.

  9. Perhaps because I am working and researching at grass roots and working particularly with women, marginalised groups, volunteers and retired people, I see things very differently from many here. I see a lot of willingness to make change, and I see many people doing what they can.

    The people who are not represented in my research are adult males in full time employment, and not because I have excluded them. Sometimes it seems to me that many adult males in full time employment are trapped by the system they’re in and can’t see that change is possible – or maybe they just don’t want to. After all, it’s a system that privileges them. What do people here think?

  10. @John Quiggin

    I usually stop at 2050 because we know so little about the technological options that will be available then. ,

    Pure Keynesianism – in the long run we are all dead.

    There is no commitment in any COP21 document that suggests to me that we will have stopped burning fossil fuels by 2050.

  11. @Ivor
    Chinese CO2 emissions in 2030 will be well below the current 9 gigatonnes. The “economic factors” behind the current plateau are structural shifts not cyclical. GDP growth has fallen below 7%, but is very far from a recession. V

  12. John, you may be interested in this graph that shows US guzzleline prices and electric car battery pack costs and the point where electric cars become cost effective:

    The graph has been around for a while but has been updated by Zachary Shahan to show estimates of what Tesla currently pays for their battery packs and estimates of what their gigafactory (or factories) may produce them for in the future.

    Oil prices currently are low, and I mean they actually are low now. Last year I was like, “Meh, that’s not cheap! I can remember when oil was cheaper than this because I’m thirteen years old!” But now I am willing to concede that oil is cheapish. But we know this isn’t going to last because oil fields are being depleted faster than new capacity is being brought on line. When oil prices start to rise again it seems very likely we will see people switching to electric vehicles for purely short term economic reasons.

    On electric car production numbers in 2015, BMW sold about 30,000 i3s and i8s. Nissan sold about 50,000 Leafs and e-NV200 electric vans. And Tesla sold 50,557 electric sports cars. There are numerous smaller electric car makers that also contributed, but the largest was the Chinese company BTD with 61,722 electric vehicles.

    Still quite small compared to the number of pure internal combustion engine cars produced in the world, but numbers are increasing, models are being improved, and batteries are continuing to fall in cost. I think that in Australia, since we are sort of being passed by as an electric car market, we often don’t realise how far electric vehicles have come.

  13. @James Wimberley

    Yes, it is possible that Chinese emissions will be below 9 GT. However there will still be substantial increase in atmospheric CO2 until all nations emit less than they did in 1900.

    So have a look at the CO2 emissions in 1900 and see what the real task is.

    The hockey stick is no more – it is now more like an ice pick.

  14. There is no point stuffing around anymore. There is a clear bottom line.

    CO2 emissions are here CDIAC and you should read the instructions and zoom into around 1900 to 1920.

    We have to be below this level.

    So make up you own minds however you will, but there is only one conclusion if you believe global warming was underway after the First World War.

    All the silly comments I have read coming from Governments at COP21 and academics, including IPCC, about reducing based on CO2 intensity, base year 1990, base year 2005, or peaking at 2030 or stabilising at 450ppm by 2050 do not even show ability to understand the problem.

    The earth’s ecosystem will warm forever as long as CO2 emissions are not well below 1920 levels.

    This extinguishes life.

  15. @Val

    I think it’s complex. City people on low incomes are forced to be environmentally conscious. They have to be frugal and frugality equals a low carbon footprint among other things. Their environmental consciousness is still genuine. They make a virtue of necessity and understand that we will all have to live more like that to survive long term.

    Our economic system is making more and more people poor and just a few very rich. Ironically, in terms of the rich having a lower marginal propensity to consume, this means that consumption and pollution go down. When most people are poor and just a few rich, the rich cannot consume as much as a well-provided middle-class would. The rich are “trying to save the world by making most of us too poor to destroy it”. But what is lost in this process is the possibility of constructing our society in a new way where most can have enough and have it in a way which does not destroy the environment.

    Most adult (white) males are trapped by the system. They are workers or discarded workers too. I can speak from experience as what I call an LSM (Low Status Male). In economic terms LSMs get as short a shrift from the system as most other working age people. We cannot claim to have suffered nearly as much sexism or racism. We have not. But we have suffered as much economism: the reduction of our being to our economic value. Once you have no economic value and no formal economic role you are a non-being in this society.

  16. As a general question, I want to ask the economists here, do the standard models of supply and demand explain the huge swings in oil prices in recent years? I give examples. Clearly, there are estimates involved.

    WTI Crude Oil Prices compared to production and consumption.

    Price

    July 2008 – $143.45
    Jan 2016 – $29.82

    Production

    2008 – 72,582,000 bpd.
    2015 – 96,970,000 bpd.

    Consumption

    2008 – 86,028,000 bpd.
    2015 – 94,000,000 bpd.

    The 2008 production shortfall was presumably met from storage reserves. Nevertheless, I find it hard to reconcile these prices with any notion of a supply-demand curve. What do economists say? Do the above figures explain a change in price from $143.45 to $29.82 per barrel? Or are these prices consistent with market manipulation by cartels and other political-economic forces? OPEC is clearly a cartel for example.

    I note there are claims extant that;

    “The cheapest oil to produce comes from Kuwait, where the per barrel cost is $8.50. Saudi Arabian crude costs $9.90 a barrel to produce and Iraqi crude costs $10.70 a barrel to get out of the ground in Nov 24, 2015 whereas the US average cost to produce oil is about $36 a barrel.”

    Note, these are claims.

  17. Ikonoclast, provided you don’t think countries (and it is countries that produce oil for the most part these days) deciding to either reduce or increase consumption counts as speculation, then for the most part oil is sold at the market clearing rate and the prices paid don’t reflect specualtion.

    This is because for oil to not be sold at the market clearing rate it would have to be going into storage in order to force prices up, or coming out of storage to force prices down. And the amount of storage is limited and it costs money to keep oil in a large tank or pay a full oil tanker to just float in one place. (And I believe oil tankers are actually pricey to rent now, unlike things such as colliers that have less coal to haul these days.)

    So the amount of manipulation that can be done is self limiting and what does occur is generally to our benefit. For example, say a speculator believes the price of oil will go up in the future, she could pay now for an oil tank to be filled now so she can sell it for a profit when the price goes up. And this activity evens out the price of oil. Filling the oil tank pushes up the price of oil when it is cheap and selling it when it is expensive pushes down the price of oil. Now if you are the sort of person who feeds off chaos and enjoys large swings in commodity prices you might not think this is doing you much good, but if you are a person who doesn’t like change, and there are a lot of them around, then it is to your benefit as it as it dampens down the amount of change. Now on occasion speculators get things completely wrong and make the swings in prices more extreme, but they are right more often than not on account of how they tend to get ruined if they are not.

    Of course, if you are the opinion a country’s or company’s decision about how much oil to produce counts as specualtion, then yes, oil prices are, broadly speaking, determined by speculation. But if that is the case you should make it very clear this is what you think at the start of any discussion about oil prices otherwise people might think you are a bit of a looney.

  18. John Quiggin: “(a) Methane and the other minor GHGs. Most projections assume unchanged methane emissions: given a relatively short residence time, that means stable concentrations. But we could greatly reduce methane emissions by eating chicken or pork instead of beef and lamb (or just less meat) and by changing the way we grow rice. That would imply declining concentrations over time. OTOH, if methane emissions keep growing we are in trouble.”

    Moving towards eating less animal products or adopting a plant based diet can cut methane emissions considerably, and reduce average rises in temperature by maybe around .5 degrees. I think this is an overlooked response, which could really make a big difference in a short time, and is not too hard to accomplish from the consumption side, although transitioning agriculture and to a lesser extent food retailing and restaurants (as these already are used to fast paced change in trends) might need government policy help …

    From Samuel Alexander’s Simplicity Collective blog:

    “And while different types of meat have fewer environmental and climatory impacts than red meat, the greatest gains can be achieved by from switching to plant-based proteins. This can land someone anywhere on the spectrum from flexitarianism to the adoption of a full plant-based diet. (For a carbon comparison of five diets, see here).

    So how much do we collectively need to reduce red meat consumption in order to have an impact?

    A reduction in methane emissions of 40% for instance would slow temperature rises by 0.5°C, and thus delay the increase in global temperatures beyond 2°C above pre-industrial levels by 15 years. This can therefore provide more time for the development of international treaties and the renewable energy sector that will inevitably be required for long-term climate stability.

    Australia stands well positioned to take a lead on this issue given our disproportionately high meat consumption and agricultural emissions. Given the dietary transition that is taking place in developing countries, where rising income levels are leading to increased meat consumption, we also have the opportunity to reframe what it means to eat well – that is, to not only satiate our culinary preferences but to eat sustainably and mindfully with planetary resources in mind.”

    Authors: Samuel Alexander, Nicholas Bowles, and Mark Pershin
    http://simplicitycollective.com/less-meat-less-heat-the-overlooked-climate-strategy

  19. “(b) Forests: Currently, forest clearing contributes to net CO2 emissions. If we could reverse that, and keep the carbon locked up, we’d get another big source of reductions”

    A decrease in livestock would also free up land for re- or afforestation. And moving away from intensicmve agriculture can also create a livestock farming practice that increases vegetation on land through mimicking natural herding movements. I saw a video about this where areas that had suffered desertification were brought back to life with controlled livestock farming, it was really interesting and a good example of how maintaining some livestock farming has environmental benefits, even though I have a plant based diet myself.

  20. Val,

    “The people who are not represented in my research are adult males in full time employment, and not because I have excluded them. Sometimes it seems to me that many adult males in full time employment are trapped by the system they’re in and can’t see that change is possible – or maybe they just don’t want to. After all, it’s a system that privileges them. What do people here think?”

    At a Greme Turner talk last year on the LtG there was a middle aged man, maybe a businessman judging by his outfit, who was talking about how he had worked hard and very long hours all his life, but looking at the research Turner was presenting it seemed to him he could have had a better work-life balance and used/generated less resources.

    I think it must be difficult for people who have invested their lives and sense of self in a way in the idea that producing more, selling more, or consuming more have good respectable social benefits Etc, and then coming across the idea that these are damaging the environment in a way that will have very negative social consequences. It would be very challenging I think.

  21. @Ronald Brak

    A bit of respect please, the looney jibe is uncalled-for. I asked a general question about oil prices. I did not make any presuppositions. I did ask opinions about market manipulation by cartels and/or governments. I did not mention the word “speculation” at all.

    The world’s capacity to store oil at low cost is much higher than the limited examples you give. I refer you to the “Strategic Petroleum Reserve (United States)” and “Global strategic petroleum reserves” in Wikipedia. In addition, leaving it in the ground (lower extraction rates than the maximum possible) is a form of storage. On the other hand, my question about market manipulation this time round, does entail, one would think, more rapid extraction. Of course, this can be subsumed under competition but OPEC we must not forget was and maybe is expressly a cartel. How much cartel solidarity it does demonstrate now I do not know.

    I do not understand supply-demand models. I have not formally learnt about them. So, I was asking qualified people if the wide price variation made sense compared to the standard supply-demand models of orthodox economics. I did that in the context that production shortfalls and surpluses over the period did not seem all that great compared to the price variations particularly in light of the considerable strategic reserve capacity of the world (which one would assume would lessen price variations if the reserves were progressively released. The US for one shows a tendency to use strategic oil reserves to manage domestic oil prices as well keeping a portion of the strategic reserve for war-making contingencies.

    My figures showed a shortfall of some 20% in 2007 and a glut of about 4% in 2015 before strategic reserve allotments into the market (which presumably would smooth prices). In round numbers that is a 25% change in production relative to demand. Yet a massive price change of $143.45 to $29.82 has occurred. This is an 80% drop in price in round numbers. I think my question is reasonable. Can or do standard supply-demand models explain this? As always when I ask objective economic questions I rarely if ever get objective answers or comments.

  22. @ZM

    Yes, meat is a problem but if you suggest to society t”hey cannot have meat to save the planet for future generations” they will say – I want my meat and I don’t care about future generations.

    The same argument applies to cars, iphones, computers, air travel and etc etc.

    Meat production accompanied with deforestation introduces 700 kg CO2e over 20 years per kg of carcass weight (C.W.).

    On cleared land it is over 20kg pa per kg C.W.

    See: Meat CO2e

    Even if meat consumption is reduced to 50kg pa – this still equates to over 1 tonne CO2e per person.

    This is 8 GT co2e when population is 8 billion.

    There is the argument that all of the CO2e in meat comes from grass that draws CO2 from the atmosphere and not from fossil fuels. It therefore only returns what it extracted and cannot add to atmospheric CO2.

    This is a weak argument.

  23. @ZM

    Yes, meat is a problem but if you suggest to society t”hey cannot have meat to save the planet for future generations” they will say – I want my meat and I don’t care about future generations.

    The same argument applies to cars, iphones, computers, air travel and etc etc.

    Meat production accompanied with deforestation introduces 700 kg CO2e over 20 years per kg of carcass weight (C.W.).

    On cleared land it is over 20kg pa per kg C.W.

    See: Meat CO2e

    Even if meat consumption is reduced to 50kg pa – this still equates to over 1 tonne CO2e per person.

    This is 8 GT co2e when population is 8 billion.

    There is the argument that all of the CO2e in meat comes from grass that draws CO2 from the atmosphere and not from fossil fuels. It therefore only returns what it extracted and cannot add to atmospheric CO2.

    This is a weak argument.

  24. Further to my reply to Ronald Brak above, I have found a chapter of what seems to be a standard economics textbook. It tells me (rendered into English) that;

    Elasticity in demand = percentage change in quantity demanded of product X
    ————————————————————-
    percentage change in price of product X

    Therefore in the oil case;

    E(d) = 24% / 80%
    E(d) = 0.3125

    Of course, I haven’t even taken into account the mid-point formula let alone possibly more arcane factors I am not aware of. Also, I have no knowledge context for the concept of price elasticity. The bare bones of the above suggest to me that any price change at all can be accommodated in supply-demand theory since there can always be a unique elasticity in demand assigned. This has interesting implications for knowledge claims in such a theory but I better not float any theories at this point.

  25. Ikonoclast, the “otherwise people might think you are a bit of a looney” remark was not a jibe directed at you. It was part of a conditional statement about how people may percieve you, or anyone, who does not make their position clear at the start of a discussion. It was not referring to “you” personally or making any assumption about what “you” personally may think.

    That said, I do realise that many people do take use of the word personally even when the context indicates that it makes no sense to do so. And my use of the word “you” in a way where its meaning is highly dependant upon context is probably one of the reasons why I have no friends who speak English. Since you have indicated that you apparently don’t like it, I will attempt to remember to use the word “one” instead of “you” in those types of constructions in comments here in the future.

  26. @Ikonoclast

    Iko: Re your plea – “January 26th, 2016 at 09:16 | #17
    As a general question, I want to ask the economists here, ..”

    Your data (2008, 2015/16) do bear that out approximately. They show major oil undersupply in 2008 relative to market demand, for instance. Right now, that situation has been reversed and prices are lower.

    Yes, in part this (2015/16) would reflect the ‘almost monopolist’ stance of OPEC re oil and their lifting of output quotas, perhaps in some attempt to wipe out fossil fuel competitors. It also could be influenced by the expectations of market participants (eg buyers) – they expect more oil to be coming from Iran for instance.

    Buyers may also be being influenced by current GNP levels and by their expectations of future demand being attenuated by almost global efforts to reduce consumption of fossil fuels and hence greenhouse emissions (with a view to helping preserve an (almost?) liveable planet.

    Paris was pretty clear about that, and since then there’s have been flurries and flurries of actions commenced or strengthened in that regard.

  27. Ikonoclast, you wrote, “…a massive price change of $143.45 to $29.82 has occurred. This is an 80% drop in price in round numbers. I think my question is reasonable. Can or do standard supply-demand models explain this?”

    Yes. When people want oil they bid the price up. And then when more oil is produced than people were using it becomes a matter of how low a price are the producers willing to accept before they cut production. When oil was $147 US a barrel people were will to pay $147 rather than make do with one barrel of oil less. Now that oil production has increased without an equal expansion in demand, oil producers are willing to go as low as $31 a barrel before enough of them start to decide they would be better off leaving oil in the ground and reducing the amount of oil available. It’s simple.

    If you want to get into the specific reasons of things like just exactly why Saudi Arabia decided to increase production and hasn’t decided to decrease it yet, yeah, I’m not going into that. For one thing it’s boring. Secondly, people’s personal opinions come into these sorts of discussions and I hate those things.

  28. Thanks Ikonoclast, but I think someone actually came up with the whole supply and demand thing a long time ago. But… since the Noble Memorial Prize can only go to the living, and if one hasn’t been given for that yet… Yes! Yes, it’s my idea! All mine! I am very well preserved! Give me the money!

  29. @TerjeP

    You are correct in guessing that John Quiggin was not suggesting that Trump has outdone the intellectual appeal of libertarians. What John Quiggin was asserting, roughly, is that Trump has outdone the anti-intellectual appeal of libertarians.

    I am confident that you don’t associate libertarians with an appeal to anti-intellectualism, but I am also confident that John Quiggin does.

  30. Ivor,

    I think people could cut down on meat and other animal products without too much inconvenience or sense of deprivation. I was a vegan for a few years when I was a teenager, before being a vegetarian for a while, then eating meat again, to now being vegan again.

    Plant based recipes have really improved a lot since the 90s, and while it might be too much to ask of a lot of people that they give up animal products all together I don’t think it would be so difficult for people to think of animal products as more of a special occasion food than the basis of a diet, which is what it has been traditionally.

    This would have health benefits as well as environmental benefits, and I think might also encourage a move away from intensive livestock production as less livestock is farmed, as I think intensive animal farming is not a very good way for animals to live their lives, although I am aware that is a different issue from the environmental impacts of livestock.

    My understanding is that there are farming techniques that decrease the greenhouse gas emissions from animals, which should be encouraged, but that an overall decrease in numbers is needed to get benefits like a .5 degrees decrease in average temperature rise.

    I think this is an area where there has actually been some good movement in consumer demand and production methods since around 2005 as well.

    I think there was momentum for action on climate change around 2004, 2005, 2006 before the financial crisis when it stalled a bit, at least in the political arena. But I think trends in food have continued moving in a direction that is more sustainable, with farmers markets, local production, community gardens, etc and plant based options are more readily available from cafes and restaurants now

  31. @ZM

    Yes

    Switching to no-meat will cut CO2e emissions.

    But how does this progress continue so that residual meat use is less than in 1920 or thereabouts?

    This is the problem.

  32. Ivor,

    I think there is a range of things. On the demand side there is raising awareness among household consumers, and also among the hospitality industry and food retailers who are sort of in the interface of consumption and production.

    On the production side I think it is important to raise awareness as well, but also I think this will need government assistance in some way — both in terms of measurements and accountability, and also in terms of helping more vulnerable farmers and businesses transition or get some sort of compensation if they can’t or don’t want to transition.

    In the interests of disclosure I started volunteering in a non-profit last year which has the mission to raise awareness of greenhouse gas emissions among consumers, but my internet comments are just on my own behalf and my own personal views about things.

    As someone who is a citizen of Victoria I also think there is a role for administrative justice in this, in terms of ensuring that the Planning and Environment Act objective of sustainability is met in how land is used and developed in Victoria, and ensuring other laws are fulfilled as well, such as the public trust doctrine which should ensure that common pool resources like the air and the climate and the oceans are maintained in good condition for the benefit of the whole public, now and into the future. I really think this is a rule of law issue — there are a number of laws that have objectives of sustainability and protection of the environment, and the fact that these laws are not being adhered to raises some questions about the rule of law in Australia, although of course we have quite good rule of law in many other areas and are lucky to be a safe and stable democracy.

    In regards to this I made a submission at a recent VCAT case last year about the proposed development of a broiler farm in my Shire here. I looked at a few academic science articles about the greenhouse gas of broiler farms, including one meta-analysis. I think that my figures are correct, but am happy to be told anything that needs amending.

    In my submission I used figures from one U.S. article and one meta-analysis article, for the range of figures of greenhouse gas emissions associated with broiler poultry per tonne up to the farm gate (emissions associated with the poultry continue past the farm gate via transport, refrigeration, waste after that but they were mostly omitted from the articles). VCAT found that I was calling them to act outside the scope of VCAT, I disagree with this, and am considering whether it is possible to request the Supreme Court to undertake a judicial review of the case, with regard to the section that discusses my submission. I am seeking pro bono legal advice for this, as representing myself at VCAT was quite difficult I found and I was not as good as the barristers, and the Supreme Court is more formal than VCAT and is a Court of Law as well, which means it would be better to be represented by a solicitor and/or barrister with a more thoroughgoing understanding of law rather than myself who has only taken one planning law subject and read about laws in relation to whether the Commonwealth and State Governments and Crown are bound to act to preserve a safe and agriculturally prosperous climate.

    One research article on broiler farms finds that from cradle to farm-gate every one tonne (1,000 kg) of broiler poultry is associated with more than 1.4 tonnes of CO2 equiv. being released (Pelletier, 2008). A meta-analysis of several articles of lifecycle analyses from cradle to farm- gate of livestock farming states that GHG emissions per tonne of chicken have been found to range from 3.7 tonnes of CO2 equiv. to 6.9 tonnes of CO2 equiv. (de Vries & de Boer, 2009).

    The three broiler farms together are capable of holding 1.2 million birds at any one time. The Weekly Times states the developer plans for the broiler farm to grow up to 7 million broiler chickens a year, equalling 14 million kg, or 14,000 tonnes, of broiler poultry grown per year.

    At the figure of 1.395 tonnes of CO2 equiv per tonne of broiler poultry given by Pelletier (2008), this equals 19.5 million kg of CO2 equiv. produced per year up to the farm-gate. At the higher figure of 6.9 tonnes of CO2 equiv. per tonne of poultry given in the meta-analysis by de Vries and de Boer (2009), this comes to 96.6 million kg (or 96,600 tonnes) of CO2 equiv.
    produced per year up to the farm-gate.

    To put this into perspective, the Garnaut Climate Change Review Case Study of the Maine’s Power Project in the Shire found the total GHG emissions in the whole Shire from gas and electricity use to be around 184 million kg annually

    Therefore, the proposed development and use of the three broiler farms would produce greenhouse gas emissions per year equal to somewhere between 10% to 50% of the total emissions produced by the entire Shire’s yearly electricity and gas use.

    Thus, the development of the broiler farms would considerably increase the greenhouse gas emissions associated with the Shire at the very time when greenhouse gas emissions should be declining to ensure a safe climate

    In general, 1.2 billion birds are slaughtered a year for meat in Australia, so the emissions of broiler farms and other poultry producers are overly high at this critical time in history

  33. @ZM

    yes, agriculture (animal husbandry) – broilers, beef and etc do emit large quantities of GHGs.

    based on current projections – the current moves by our politicians so far will have Australia INCREASING CO2 emissions until 2020 but declining in intensity and on a per capita basis.

    As with fossil fuel exploration and extraction, there appears to be no high-policy initiative to restrict animal farming or coal mining etc as required.

    Some animal products may be possible in the future if the earth is stabilised at 450ppm. But I am not aware of any estimate of the available carbon sink at this point. Maybe this point is somewhere in IPCC ARs?

    The size of available future carbon sink is the key. Presumably it may permit some poultry farming, and beef, pork and etc production but our diet must become essentially plant based as evolution intended.

  34. Ivor,

    “As with fossil fuel exploration and extraction, there appears to be no high-policy initiative to restrict animal farming or coal mining etc as required.”

    There was an interesting VCAT decision a while ago, the Dual Gas case, which was intended to stabilise greenhouse gas emissions from gas power plants. The company wanted to build an extension to its power plant, but VCAT decided that an extension that would emit X amount of ghg could only go ahead if another power plant that emitted X amount of ghg was shut down.

    The Victorian government is currently working on policy development for both livestock and climate change, which will be interesting to see what happens or if there are opportunities for public consultation etc.

    The broiler farm developer was arguing that Victoria should increase the development of broiler farms as other states were leading in broiler farm development, while I was arguing that Victoria should stabilise the number of broiler farms bearing in mind the current number of broiler farms is probably exceeding the quotient of Victorian ghg emissions that should be allotted to broiler farms and really that numbers of broiler farms probably will need to decline in the future, which means the development is economically risky for the developer.

    “Some animal products may be possible in the future if the earth is stabilised at 450ppm. But I am not aware of any estimate of the available carbon sink at this point. Maybe this point is somewhere in IPCC ARs?”

    I don’t think there is enough research on this topic yet in terms of providing a model of what a sustainable agricultural sector would look like. It is an emerging field I think. Of course there are lots of farmers who in practice are trying to adopt sustainable farming but in terms of a systems perspective that covers what sustainable agriculture would look like in a State or Nation or the World I think it is emerging knowledge.

    Just from the variation in figures for ghg emissions from broiler poultry, there is a need for more research to be precise for different locations, and I have also read that agriculture including livestock is considered one of the most difficult fields to measure greenhouse gas emissions, i think because there are a lot of variable factors like soil quality, contribution to deforestation, etc,

    But you’re right, people can change their diet to be essentially plant based now without necessarily needing someone to model sustainable food systems (although I think the latter is also needed).

  35. Ivor :
    @ZM
    Yes
    Switching to no-meat will cut CO2e emissions.
    But how does this progress continue so that residual meat use is less than in 1920 or thereabouts?
    This is the problem.

    Mate: to be a useful conversationalist you need to be saying things that add to the discussion, which is to say facts of which others are unaware, perspectives they had not considered or conclusions they had not realised.

    Do you believe that you’re doing this?

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