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. The RACQ’s and NRMA’s of this world could have been doing a lot more about this.

    Meanwhile GM and Tesla are mobilising electric cars.

  2. Not so long ago, in historical terms, GM played a role in killing the electric car. See “Who Killed the Electric Car?”.

    Now that Elon Musk and his company Tesla have revived the electric car, will we see GM (saved via Chapter 11 Bankruptcy and massive govt monies of course) coming along to the party and saying “Oh yeah, we knew all along it was a good idea.”

    Of course, the contention that the electric car is a good idea depends on an assumption that the car itself is a good idea for our future. As Val pointed out, this assumption is very doubtful.

    However, as part of a weaning process it might have a value as in;

    ICEV to EV to clean (no private cars)

    In the process of weaning us off our “diddums-must-have-his-car” culture and getting us to grow up into ecologically ethical adults, EVs should become all of smaller, more efficient and less numerous; helping us on in time to a full no-private-car culture.

  3. It shows how much things have changed that JQ’s starting point was the aim of a large reduction in primary energy use. With practically limitless cheap wind and solar, energy is hardly a long-term constraint. The nice joke is that you get the reduction in primary energy intensity anyway, from the massive reduction in waste (see the LLNL Sankey charts of US energy flows).

    Also, a 50% reduction in fossil fuel use in Australia and OECD countries would have barely dented the doomsday machine of rising ICEV and electrical fossil fuel use in the developing world. We really do have a lit to thank Germany for.

  4. The bottleneck is congestion. As everyone knows, if you build a new road or add another lane on a freeway, you just get more people driving (and fewer people staying at home, or catching some form of public transport, or walking, or cycling). Cities with lots of freeways and lots of suburbia have lots of driving.

    So the solution is really easy: blow up all the freeways and replace them with railways, reducing available roadway. Reverse induced demand. Describe demolition as an “upgrade” like they did when they got rid of the trams – cause railway is cheaper and much higher capacity than freeway. Cancel the tax deductibility of the RACQ in order to achieve this, politically (and slash Main Roads’ budget, obviously).

    In Brisbane, the obvious first target is the Riverside Expressway. Hire some Danish engineer you pay to find it structurally unsound then blow it up immediately. Then do the same thing with the Gateway, and you’ve cut car use/total trips in SEQ from 90% to about 70%.

  5. And in another 10 years you will probably want to post it again … because nothing will have been done.

    In 10 years there may be a few electric cars running around OECD streets but this will only be a cosmetic feel good factor for domestic consumption. There have been improvements in battery technology.

    Petrol/diesel car numbers, plane flights, ship journeys and train trips in the rest of the world will not stay constant at 2015 levels.

    CO2 will continue its current trend until well past 2020.

    And that is the end of the line.

  6. @John Chapman

    “…depends on an assumption that the [electric] car itself is a good idea for our future…”

    Don’t worry, Ikono, as one of JQ’s other interlocutors has pointed out, there isn’t enough copper in the world to build enough EVs for the present world population, never mind for double that in 40 or so years (goodness, what are we going to do about Malware’s Fraudband Network then ?).

    Unless, of course, we find a way to more or less economically extract the huge tonneage of copper (and iron and lots of other stuff) from solution (and/or suspension) in the world’s oceans and seas. Then we’d have enough. Hallelujah !

    PS ProfQ: you really did write big, long blogposts back in 2005. Just as well that tl:dr hadn’t been invented back then.

  7. 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.

    It’s an admission that few public policy advocates seem willing to make. There is a public health cost associated with end of life diseases from smoking but they are arguable equal to or even less than the public health cost for end of life diseases that non smokers suffer. The fact is that most people make an expensive exit irrespective of whether it is from smoking or not. And even if we ignore that comparative issue the current regime of tobacco taxes raises vastly more revenue than can ever be justified by public health costs.

    As for your point about the impact of prices on behaviour I would think smoking was a bad example. Smoking rates have declined but it has hardly been rapid. It’s been a stubborn social problem. Personally I think we would get a more rapid rate of cessation if we simply permitted and promoted technical alternatives like e-cigarettes. A better example would be road tolls or fuel taxes.

    But on decarbonising the economy I do agree that a price signal, via a carbon tax, remains the most sane policy response. As long as it’s instead of rather than as well as the other regulatory tools. eg handouts, mandates etc.

  8. On electric cars I’m bullish. I think the switch to hybrids and then electricity will happen and the pace will just depend on progress in batteries and fuel costs. But whether it’s plug in hybrids or full electrics I think most personal transport will be powered by electricity in the not to distant future. Of course we have to allow for swapping out the current fleet.

    I continue to be bearish on wind power and solar power. Even with storage options as cheap as hydro they don’t have a high enough EROEI to sustain a developed economy. Although for both, even with storage, it is certainly higher than one.

  9. @GrueBleen

    40 odd years after the Club of Rome, I think it’s pretty clear that the availability of metals is never going to be a serious constraint on anything. What matters, as the problem of climate change indicates, is the assimilative capacity of the environment.

    I didn’t see the purported demonstration that electric cars would exhaust the world supply of copper, but I’m confident it’s wrong. Looking at an individual in the developed world, it’s obvious that they are already using far more copper (in piping, their connection to the electricity grid and various indirect uses), than could possibly be required to give them an electric car.

  10. [Aside: The risks of smoking are not primarily borne by the smoker: everyone they smoke around is subject to risks associated with cigarette smoke. My grandfather smoked like the proverbial train, and we would sit in the lounge with him, sucking it up. You could cut the air with a knife.
    Same was true at the local pubs: the air was thick to point of cloying, thanks to cigarette smokers. The only pub at that time with a non-smoking bar was a joke: it was this little corridor, about 2 metres in length, with a no smoking sign and a couple of stools—and it was the conduit between the front and the back bar rooms. So if you were a non-smoker you were effectively excluded from enjoyment of a pub, club, etc.]

    Anyway, on to the topic at hand. I disagree with the statement that most of the “sceptics” are accepting human-related climate change, if by sceptics we mean the shills and charlatans. They have been very busy of late, ensuring that the republican nominees have talking points with cherry picked time series, or just outright bunkum. As usual, Eli Rabett and Tamino slaughter the nonsense, not that the politicians are concerned, for once they’ve presented to a senate committee, their bulldust does its magic, same as it always did. Politicians don’t care much for evidence as a means of winning a debate.

    As for renewable energy and storage and distribution, I think now that a more robust response from more nations is forthcoming, there is a significantly greater level of innovation occurring: in short, the smart inventor types, and some of the big corporations, are seeking ways of entering this space. With time, we’ll see if there are any “break-through” ideas or not, but even without such disruptive change, the incremental advances in solar PV technology and wind turbines, including underwater ones, have more clout, as the size of the market is so much bigger than a decade or two ago.

  11. @John Quiggin

    I am happy to have a dollar each way on the EVs issue. If you are right then switching to and keeping EVs indefinitely makes sense but only in the context of this being combined with much improved mass transit, bike-ways and walkways.

    If Val is right (EVs and the infrastructure they require will prove unsustainable) then EVs (more efficient than ICEVs and scaled down in size and numbers) will provide a transition pathway to a future without personal automobiles. This transition path is logical and necessary as full fleet turnover is still going to be quicker than full and radical infrastructure “turnover” for the entirety of all transit issues. It takes longer to turn over a full built infrastructure than a car fleet (errm at least in peace time).

    Either way the transition to (and then maybe through) EVs is the correct path.

  12. The decline in the smokers’ demographic share is most likely partly the result of various factors inducing smokers to become non-smokers, but also partly the result of the demographic replacement of smokers by people who never take it up (probably as the result of a similar combination of factors). In other words, policy measures may have encouraged some people to give up smoking; but at the same time smokers have been dying off and their numbers have probably not been replaced because, probably, the same policy measures have discouraged some people from ever taking up smoking.

    The distinction does have some significance because the highly addictive properties of nicotine need to be overcome to persuade smokers to stop smoking, but not to persuade non-smokers never to take it up.

    I wonder how similar the pattern might be with car use.

  13. @John Quiggin

    Hmm, well I’m not sure what The Club of Rome proves one way or another, but of course I’m willing to consider any evidence.

    But it wasn’t a purported “demonstration” ProfQ, it was just a comment entry by Geoff Edwards (January 18th, 2016 at 20:37 | #4 Reply |) to your recent post Decarbonizing transport
    January 18th, 2016. Nonetheless, I was happy to pick up on it as a theme for discussion.

    Too save you a bit of time, the relevant bits from Geoff’s comment follow:
    _____________________________________________________________

    3. Although consumption of carbon fuel is the most prominent limiting factor, it is not the only one. There is probably not enough copper to electrify the world’s vehicle fleet, without mentioning other vital minerals. CSIRO and UTS Sydney have produced some solid analyses of “peak minerals” which for many of the materials necessary for generation of renewables is likely to occur within a current planning horizon.

    4. The current low prices for these ingredients are taken by cornucopians as indicating that there is an abundant supply. Rather, they indicate that the financial commodity markets are disconnected from the geological balance sheets and are a very poor proxy for geological shortages.

    5. The richest and most accessible ore bodies have already been mined and the remaining ones will require progressively more fossil fuels to exploit them. This will increase the dilemma and narrow the range of options. Go to item 2 above.

  14. Donald – the costs to others due to passive smoking are mostly mitigated by the ban on work place smoking.

  15. If they eventuate driverless cars will be more transformative than electric cars. I suspect we will get both. And in so far as driverless cars are used like taxis the issue of recharge time will disappear as a significant end user concern.

  16. As at today Tesla has a market cap of US$27 billion. Ford is US$48 billion. Is Tesla (founded 2003) really worth more than half of Ford (founded 1903)?

  17. “CSIRO and UTS Sydney have produced some solid analyses of “peak minerals” which for many of the materials necessary for generation of renewables is likely to occur within a current planning horizon.”

    I’m afraid this is nonsense. All three points there are in fact. The point is made at length here:

    Click to access The-No-Breakfast-Fallacy-ONLINE.pdf

    It all stems from a complete misunderstanding of what mineral reserves and mineral resources actually mean. Same problem the original Club of Rome had.

  18. I suggest watching this presentation by Dr James White. He makes some fundamental factors blatantly clear and totally understandable, and introduces some very succinct factual relationships. Take particular note of the projected life of coal reserves under real world considerations (using actual maths).

    On the hard cash, I am quite fascinated at how today’s low oil price is proving to be more economically destabalising than a high one is. It highlights the total fallacy of the Libertarian arguments that everything should be at the lowest possible cost, especially labour. The fact is that any commodity’s cost should fairly represent the real and complete cost of providing it, and variations in cost have only a marginal proportional impact on its users. Yet small marginal impacts can have a very significant overall impact on a total system as James White clearly demonstrates.

  19. the Libertarian arguments that everything should be at the lowest possible cost

    Straw man fallacy.

  20. @Ikonoclast
    Thanks Ikon. JQ has explained his ways of working out what we need to do, and I guess they are economically ‘respectable’. Mine may not be in mainstream economic terms, but I think it’s legit anyway.

    What I do is use the online calculators that are available to tell you how much CO2 emissions your lifestyle generates. Mine comes close to sustainable levels, but I struggle to stay within them, due to things like the occasional long trip by plane or car.

    My electricity usage is about half of comparable households in Melbourne, I don’t own a car, my transport mode is normally walking/cycling/PT, I’m vegetarian, I eat a lot of locally grown fresh produce, and I live simply, rarely buying many consumer goods. I’m not saying that to boast or be holier than thou. My point is, that’s how I live now, and I’m struggling to stay within sustainable per capita CO2 emission levels, even with the world’s current population. Very few people live the way I do at present – we are still widely seen as a bit extreme and fanatical, not ‘normal’. So if you imagine a world of 9 or 10 billion people by 2050, and most of them wanting to live the way ‘normal’ Australians do, it just doesn’t seem feasible.

    So when I read people like JQ basically suggesting that we can achieve sustainability without major change, essentially by tinkering around the edges of the way we live now, I think ‘you’re kidding yourself’. I’m not a pessimist or doom sayer, and I think we can achieve sustainability, but I think major social change is necessary to do so, and I think those of us who study or think about these issues need to start saying so, loudly and clearly.

  21. John, are you sure this is so applicable now, compared to 2005? Just the first few paragraphs describe a policy environment that is pretty much the opposite of what we are seeing. Since 2005 most of the reductions in emissions that the US and China achieved have been through regulation not price rises, and indeed we have seen emissions decouple from growth even as there has been a massive drop in the price of coal and oil due to an oversupply, not any form of taxation or regulatory mechanism.

    Also your claim that we can stabilise the climate with a 60% reduction in emissions is surely just flat-out wrong? We have a carbon budget, and the only way we can stay inside it is to get to 0 emissions. A 60% reduction will not stabilize the climate, it will simply delay the damage a little.

    Finally, your smoking example is not a good one. As I have argued at my blog, the campaign against smoking is a very good example of how destructive behavior cannot be reduced by price rises alone, but requires massive regulatory intervention in markets. The equivalent intervention for oil and coal would be a ban on all advertising, restrictions on who can use oil and coal and when, zones where all use of it is banned (which continually expand), ongoing public campaigns about how bad it is, extremely heavy fines for anyone breaking the consumption rules, and court cases to extract massive punitive fines from the oil companies, as well as to open up all their private documentation for public access. These interventions would have to occur at the same time as taxation increases.

    The idea that taxation alone has pushed down tobacco use is a free-market myth. Tobacco use has declined to 15% in Australia through the most intensive regulatory intervention ever seen on a non-pharmaceutical product. Good luck achieving the same large changes in petrol use through taxation alone!

  22. also I will add that a big portion of the decline in smoking has been through the government subsidizing cessation technologies and a huge program of research into effective cessation strategies. The equivalent for carbon is obviously huge subsidies of alternatives to oil and coal.

    We are nowhere near as serious about reducing carbon emissions as we are about stopping smoking, and that fact is a really really pathetic indictment of our response to a civilization-changing threat.

  23. Since 2005 most of the reductions in emissions that the US and China achieved have been through regulation not price rises, and indeed we have seen emissions decouple from growth even as there has been a massive drop in the price of coal and oil due to an oversupply, not any form of taxation or regulatory mechanism.

    In the US coal is being displaced by cheap natural gas. The reduction in emissions may gave more to do with advances in fracking technology than regulations.

    https://www.washingtonpost.com/news/energy-environment/wp/2015/10/28/how-super-low-natural-gas-prices-are-reshaping-how-we-get-our-power/

  24. ie it’s the relative price of coal that matters and coal is now more expensive relative to gas.

  25. Maybe TerjeP, but I suspect a lot of plants would continue to operate on higher priced coal without the regulatory impetus, because the switch over requires capital investment. Coal has a whole bunch of regulatory impediments that effectively raise the cost of using it beyond just its sticker price (e.g. clean air emissions standards).

    Also, even if correct, your point only applies to coal, not oil, which has no lower-price equivalent that can be exchanged without capital investment (i.e. buying a new, expensive car).

  26. Can others recall vehicles emissions/fuel consumption ever getting a run in recent elections? i recall 1996 when Howard promised to reduce sales tax (?) on FWD monsters to make it equal to all other vehicles. He announced this standing in front of a mega-expensive luxury Landcruiser as i recall. he won and did it. Seems to me that was the political class’s sole excursion into “positive” policy change. As a diesel driver I’ve spent a lot of $$$ over the years driving more efficient cars and paying vastly more for my fuel than unleaded. It’s only lately that diesel has been cheaper than petrol. Shocked on my one os trip to find diesel way cheaper as it was subsidised (?).

  27. @Val

    It will almost certainly require generational change. Generations, or cohorts to be more accurate, seem unable to give up things they have “fallen in love with” and hold dear. In Freudian parlance, which occasionally is semi-accurate, they are not able to give up things they have cathected with. If “cathect” is taken as meaning “to invest emotional energy in a person, object, or idea” then this helps us to describe people who are over-invested in this sense and cannot give up objects which rationally they need to give up for their own and the biosphere’s health.

    Cathecting with consumer objects as fetishes is somewhat related to what Marx identified as commodity fetishism. Marx did not use the word “cathect” so far as I know, nor take his socioeconomic theory “inwards” into psychology. One test of when an object has passed from rational considerations into cathected commodity fetishism would be I imagine the test implied by the analysis above. The person cannot give up an object which is harming them or their world even when presented with rational and scientifically backed reasons for doing so.

    Generations, or cohorts, have “fallen in love” with the car in their formative years. That’s when it always happens. In addition, familiarisation, enculteration and general commodity fetishism in the Marxian sense mean they cannot conceive of a society without cars. The material basis of society supports (for the time being) this conclusion. The global economy is heavily dependent on car manufacture for economic activity. The infrastructure is heavily conditioned by the need to accomodate cars and their requirements. People who are unhealthily invested in cars will probably have to pass away to allow the full change necessary. It seems to me that maladaptive ideas often die only when the “carrier cohort” dies.

    I do think it will be an “evolutionary” process though. As I described in my reply to J.Q., I thank we can change to electric cars (smaller, less numerous and more efficient) as a necessary transition phase. The car fleet can be changed faster than our infrastructure can be changed but eventually the whole infrastructure needs to change to support a no-personal-autos urban infrastructure and environment. A problem will be if the environmental crisis is too nearly imminent for this staged transition path.

  28. “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.”

    Coherent public policy on emissions requires a policy on population growth rate including the quantification of impact of population growth on emissions.

  29. I’ve lived in Japan and know at lot of Germans, irrespective of what gov’t wants its a matter of culture. Japanese and Germans are really amazing when it comes to minimising waste – essentially waste linked to remediating climate change. I am in awe that they take this to a personal level – we need to do this in Australia.

  30. It will almost certainly require generational change.

    Which is the problem with advocating a transformational social change as opposed to a program confined to the energy sector. We have to get started on decarbonization right now (ideally should have started 20 years ago) and have the job pretty much complete by 2050. Most people under 50 will still be alive by then, and even healthy older folk like myself have a chance. So, as Rumsfled might have said, we must do the job with the society we have, not what we might hope for in a generation’s time.

  31. @faustusnotes

    I think you’ve misinterpreted me on tobacco. I don’t see the role of prices as central.

    And I think, broadly speaking, we are seeing the kinds of things you mention happening with coal in particular – bans on funding for new coal mines and new power stations, divestment of existing shareholdings, steadily increasing regulation restricting local air pollution, a radical shift in public attitudes, and so on.

  32. In that case John I think the final part of the post – about smoking – disagrees with the first part of the post, which seems to be arguing that price changes alone will be sufficient. Perhaps I’m misreading you.

    I agree we are seeing some of these broader policy moves in coal, but your post was about driving – where we have not seen anything like the required policy changes to discourage driving and where in any case these policy changes are very difficult, since they require urban planning changes. This is what Val is getting at with the generational change comments and while you are right that we need to go to war with carbon with the society we have, not the one we want, I think we aren’t going to win the war with the society we have. We could have if we had, as you say, started the changes 20 years ago, but we didn’t – and we have folks like Tim Worstall to thank for that potentially cataclysmic delay.

    Do you think the urgency of the task has changed since 2005? Your post seems to suggest that a 60% reduction in emissions is enough but I don’t think that was the case in 2005 and it certainly isn’t now.

  33. I’d like a little credit also for helping to delaying the war on coal. Although of course I’m merely a foot soldier. And from my perspective the war did in fact start more than 20 years ago it’s just the greenies have not won. Although they have clearly inflicted some damage.

  34. @TerjeP

    I think you can certainly share the credit for destroying the credibility of propertarianism/libertarianism as a political movement. When I started blogging, libertarians seemed like my most important intellectual opponents. Thanks to climate denialism in particular, they are now an unimportant group of culture warriors. Rand Paul’s 2 per cent support in the Republican primary (implying way below 1 per cent of US voters) is a pretty good indication of how well they have done over the past 15 years. Their apparent support in the Tea Party has shifted almost entirely to authoritarians like Trump.

    The despair evident in this piece
    https://reason.com/blog/2016/01/15/the-gops-two-man-race-between-trump-and
    is a pretty good indication.

    And, to repeat, silly-clever logic chopping combined with a willingness to make up the facts as you go along has rendered libertarians defenceless in the face of someone like Trump.

  35. I don’t think you are saying that Trump has trumped libertarians in the intellectual sphere. But it does seem a bit like you are saying that. Which would be an odd call. I don’t think Trump has much at all in the way of any intellectual underpinning on the policy front.

    In Australia the libertarian jaunt into party politics, ostensibly via the LDP, is still in it’s early days and only time will tell if it is a success. But equating the electoral success of ideas with the intellectual merit of those ideas is rather problematic. Do you really mean to imply that merit and popularity are the same thing? God I hope not.

  36. Terje, I don’t want to bring this down too far into the realm of personalities, but if you think your LDP representative in the Senate is an example of “intellectual merit” then I think you too are kidding yourself. More an example of ‘whacky’ I’d say.

  37. @TerjeP

    Which war are you a foot-soldier for? I know conservatives like to make war, not love, and I know they are having a culture war against The Left but it seems odd for a libertarian to be supporting a war on culture when libertarianism is culture free.

    Only thing libertarians have and here they are very similar to the Donald Trump is an overweening sense of their importance in the grand scheme of things.

    Where do you think any support for the LDP will come from? Are business people impressed with him and his awesome ideas about how awful the nanny state is and how we need to restore cracker night? I suppose cracker night is a ‘cultural experience’ for someone like David? Do you know if he was particularly excited by this yearly event and it still motivates his political thinking?

    You’d think the country folk here in Qld would be impressed by his advocacy for more and better guns so everyone can protect their property from the bad guys, but strangely people seem to think he is a “twat”; thing is there just aren’t a lot of enemies in the Aussie bush who need shooting.

    And you know, a lot of them have been touched by gun deaths, suicides and murders and murder suicides so they are wondering if the regulations that make it more difficult to get to a gun when emotions are running high could actually be a good idea and not just the evil left forcing them to be unfree. Do you reckon the 80 old bloke who shot the govt worker in the back was just protecting his property?

    I’m a bit of a foot soldier for the greenfilth left although I’m not making war on my right wing neighbours just winning their hearts and minds with my rational and informed opinion particularly my opinion about how to raise children who do not grow up to be greedy selfish glibertarians and how to build a community that can respond to the uncertain future these children face.

    And seriously, in my little country town, if we want fireworks, as free and creative individuals cross borders to buy them and just set them off anytime we like; it takes at least 20 minutes for the local copper to get here and nobody dobs anyway. Last time we had a firework party one of the rockets lodged in the neighbour man’s tree and he – the neighbour – and number two son who had brought the crackers spent some time getting to know each other while they put the fire out.

    You have no idea of how a community can work to provide sufficient individual freedom for responsible adults and also support for the vulnerable, do you?

    Tell us about merit and popularity Terje, is there no relationship and what God has to do with it? Are libertarians Christians now?

  38. @TerjeP

    Re Terje: ‘I’d like a little credit also for helping to delaying the war on coal. Although of course I’m merely a foot soldier.’

    Always thought so Terje. You are a lackey, an obstacle to progress.

  39. From the ABC;

    “Global temperatures in 2015 were by far the hottest in modern times, according to new data from American science agencies.

    Not only was 2015 the warmest worldwide since records began in 1880, it shattered the previous record held in 2014 by the widest margin ever observed, a report by the National Oceanic and Atmospheric Administration (NOAA) said.

    “During 2015, the average temperature across global land and ocean surfaces was 0.90 Celsius above the 20th century average,” the NOAA report said.”

    Something seems to be changing and changing fast. This is not say more warming is a total certainty but it seems highly likely now. Looking at Yarloop’s before and after aerial bushfire shots is very concerning. A town with green gardens and shrubs and a wide effective fire break around it – as plowed and over-grazed paddocks – is swept end to end and burned to the ground. These are not “just” bush fires. These are firestorms and fire tornadoes. The term megafire is increasingly being used too.

    Meanwhile;

    “Plastic rubbish will outweigh fish in the oceans by 2050 unless the world takes drastic action to recycle the material, a report has warned on the opening day of the World Economic Forum (WEF) in the Swiss ski resort of Davos.”

    The world throws away about $150 billion worth of plastic waste a year. And the PTB try to tell to us capitalism is efficient!

  40. You know TerjeP, standing in the way of AGW mitigation is not something you should be proud of. Is it that you don’t understand how dangerous the warming is, or are you actually proud that you have contributed to the destruction of industrial civilization?

    And did you do it all for free? I have a suspicion you did, which makes the admission all the more pathetic.

  41. I also would strongly query the conclusion that a 60% reduction of carbon emissions by 2050 is adequate.

    All the figures you get for the carbon or ghg emission budget are given in terms of probability eg. 50% , 66% , 80% etc and I think the higher probability is the one that should be aimed for, particularly now that the international agreement is to limit warming to 1.5 degrees.

    From a 2014 interview with Professor Malte Meinshausen who was one of the authors of an important paper on the carbon budget:

    “The latest science – from the just-released IPCC report – confirms that the total global budget that gives us a good chance of staying below 2°C is around 2,900 GtCO2. Until 2011, we had emitted around 1,900 GtCO2 of that budget. And every year thereafter we’ve emitted around 38 GtCO2. That leaves us with around 900 GtCO2 left from 2014 onwards, an amount that we are going to consume in just under 25 years, if emissions stay at today’s levels. Thus, it is time to slow down with our emissions, if we do not want to be faced with lots of costly stranded assets, such as fossil fuel power plants retired at young age.

    For 1.5°C, the budget is going to be much smaller. Even under very high emission reduction rates, there is a relatively high risk that we could overshoot 1.5°C. However, in this scenario, we could bring average temperatures back down again to 1.5°C by the end of the century. Roughly speaking, the carbon budget for such a 1.5°C pathway is going to be half of the 2°C one.”

    I think that the figure given of 2,900 GtCO2 is only for a 66% chance of staying within 2 degrees of warming, and I am unsure if the 900 GtCO2 budget remaining takes into consideration ghg emissions of gasses other than carbon, and if not, then that would lower the 900 GtCO2 figure.

    Combined with the 1.5 degrees target announced at Paris, a figure which Meinshausen states above would halve the carbon budget, I think the 60% reduction in carbon emissions by 2050 is significantly under estimating the needed decrease in ghg emissions over the next 20-30 years.

    I think Val is right that there are very significant changes needed, and also limited time remaining to achieve these. I think it’s also important to draw attention to positive co-benefits of a lot of changes to mitigate and adapt to climate change, as a lot of possible solutions would have social benefits not only environmental benefits, as well as having health benefits, and also make urban areas more beautiful and pleasant to be in.

    (Interview Source: http://reneweconomy.com.au/2014/meinshausen-why-we-have-to-suck-co2-out-of-atmosphere-51492)

  42. You know TerjeP, standing in the way of AGW mitigation is not something you should be proud of.

    If coal disappears because we develop something better then I won’t mind one bit. But the cultural war on coal, where idiots from the Greens dress up at the local parade as a block of coal and make boogie man poses at the kids, is an obscenity I’m proud to oppose. Coal has been a gateway out of perpetual poverty for humanity. And to date it is unmatched as a source of reliable, cheap electricity for the masses. Natural gas is stepping up and may replace it but it hasn’t done yet.

    AGW mitigation at any price is absolutely something I’m proud to oppose. And currently we are being forced by fanatics to spend too much on what is a modest problem.

  43. The decarbonised transport mix will become I believe
    Personal transport:
    EV’s and PHEV’s
    Local Trucking:
    EV’s PHEV’s and Bio fueled Bio Diesel and E85 (engines designed for straight ethanol are very efficient.
    Long Range Trucking:
    Diesel and Bio Diesel
    Aviation personal:
    PHEV’s (see Pipistrel and AirBus eFan) PV’s
    Aviation Commercial:
    Algal Oil Bio Fuelled, Kerosene and combinations of both, Electric hybrides (see Boeing and AirBus)
    Heavy Commercial Shipping:
    Nuclear

    SAAB’s demise at the time of releasing their flexfuel engine http://www.gizmag.com/go/3531/
    but I believe that it is inevitable that this will be redeveloped.

  44. John Quiggin,

    In relation to the topic of the OP on whether the climate change discussion has evolved on not since 2005, I was wondering if you had any thoughts on Lord Stern’s recent book and talks Why Are We Waiting?

    I came across this in a Robert Manne article in The Monthly, and while Stern’s earlier work centred around a slow decrease in ghg emissions of 1% per year I think , but now he is saying the need for change is urgent and advocating higher cuts in ghg emissions.

    “Stern argues that the risks and costs of climate change are worse than estimated in the landmark Stern Review in 2006—and far worse than implied by standard economic models. He reminds us that we have a choice. We can rely on past technologies, methods, and institutions—or we can embrace change, innovation, and international collaboration. The first might bring us some short-term growth but would lead eventually to chaos, conflict, and destruction. The second could bring about better lives for all and growth that is sustainable over the long term, and help win the battle against worldwide poverty. The science warns of the dangers of neglect; the economics and technology show what we can do and the great benefits that will follow; an examination of the ethics points strongly to a moral imperative for action. Why are we waiting?”

    https://mitpress.mit.edu/books/why-are-we-waiting

  45. I find it interesting, TerjeP, that when you argue in defense of nuclear power you make lots of noise about how dangerous coal is, but when you argue against solar you go to great lengths to avoid mentioning it. Especially interesting given the recent airpocalypses in China.

    In any case this meme of coal as the only development path is wrong in so many ways:

    1. In many countries without a grid, electrification with coal is not cost-competitive with solar and generators because of the cost of establishing a grid (where this is even possible)
    2. In countries without coal or the ability to mine coal, coal is a much more expensive and inequitable development path than solar and renewables, due to fuel costs
    3. Coal has significant negative health effects – electrification has removed indoor air pollution as a killer in China, only to replace it with outdoor air pollution, for example
    4. Development politics means that industrialization is impossible while China dominates the world industrial landscape, meaning that the heavy industrial development pathway supported by coal is no longer viable in many countries
    5. Most of the easy gains in development – from clean water, vaccines, early childhood interventions and nutrition security – have very little requirement for access to industrial electrical systems
    6. There are now other development pathways than coal
    7. Some countries only realized health gains from industrialization after htey started switching away from or restricting the use of coal, see e.g. the UK and Japan
    8. Some countries developed through the use of child labour and starving the Irish. Just because a development pathway works doesn’t mean we should use it.

    Of course you won’t engage with any of those points because you aren’t actually interested in the welfare of people in poor countries. If you were and you cared about global warming you would be advocating for some kind of rationing system for coal, in which only the poorest countries are allowed to use it and the rich coutnries invest to ensure that those poor countries can protect tehir air quality and shift away from coal quickly. I’ve never heard you say that.

    And none of this takes into account the fact that the long-term global warming effect of coal will make the short term disadvantages of slow development look like a walk in the park – something you consistently refuse to accept.

  46. Copper is used for electrical wires because it is relatively cheap, low resistance, inert and malleable. It is not irreplaceable. Copper was once considered essential for plumbing but it is now replaced in a lot of plumbing applications by plastics and flexible hoses.

    There are other metals and that could be used in electrical applications. Aluminium – which can be scraped off the ground in a lot of places, though is expensive to smelt – has around three times the resistance of copper. Adding 3% of copper to aluminium brings it’s resistance to near the same value as pure copper. Copper still has better malleability and resistance to oxidization but this may not be an issue inside the motors of an electric car. Aluminium has its own positives, especially weight when things move around. It is already used in electrical applications.

    Materials are chosen on cost and performance. Engineers tend to use conservative solutions when they work reasonably well. Change the cost or requirements sufficiently and substitutions to other existing or new materials will occur. We won’t “run out” of copper in any absolute sense but it may be the chosen material for less applications in future.

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