There’s been a fair bit of buzz about an article in New York Magazine with an apocalyptic picture of climate change over the next century. I’ll for a more complete response later. But as it happens, I was already thinking about a much more optimistic post.
From the Climate Change Authority, of which I was a Member until recently, here’s a set of emissions trajectories consistent with a 67 per cent probability of limiting warming to 2 degrees.
There’s a pretty good case to be made that we are on the blue trajectory, and that, with decent political outcomes, we will be able to go below it and hold warming to the Paris aspirational target of 1.5 degrees. That would still have plenty of negative effects, for example on coral reefs, but it would not be an existential threat to humanity.
The points that are critical in the blue trajectory are a peak in emissions, right about now and a drop to zero net emissions by 2050. The first looks to have been achieved. As for the second, we are already seeing commitments to this goal from developed countries and jurisdictions, and there’s every reason to think it can be achieved at low cost.
As an economist, this is about the outcome I would have expected given a global commitment to an emissions trading scheme with a carbon price on a rising trajectory to $US100/tonne or so. In fact, we’ve seen nothing of the kind. There has been no real global co-ordination, and where carbon prices have been imposed, they have been low and limited in scope.
Instead, we’ve had a series of favorable technological surprises of which the most striking have been the plummeting cost of solar photovoltaics, and advances in battery technology allowing both low-cost electricity storage and affordable electric vehicles. There’s no reason to think these advances have run out, or that any of the remaining problem areas (air transport, cement manufacture and so on) will prove insuperable.
What these developments mean is that carbon-based electricity generation is on the way out, and that the end of the internal combustion engine is in sight, probably well before 2050.
Should this have been a surprise? In one sense, perhaps not. There were a lot of potential technological options out there, and we only needed a couple to work. There were plenty of failures and disappointments (nuclear fission and fusion, carbon capture and storage, biofuels, geothermal) and more limited successes (energy efficiency, solar thermal and wind power) along with the surprise success of PV. The same point may be made in the particular case of storage. Any reversible process involving energy can form the basis of a storage technology, so there is a huge range of possibilities, from flywheels to pumped hydro to batteries based on many different chemical reactions. Viewed that way, it would be a surprise if we couldn’t find a good one.
On the other hand, there’s no obvious technical reason why we couldn’t have developed most of these technologies decades ago. So, it clearly needed a push from policy and public concern to get them to happen. Solar feed-in tariffs of 50c/kwh may look excessive now, but policies like this, in Australia and elsewhere, gave the industry the start it needed. Even without price incentives, the importance of the problem attracted attention from researchers and technologists that might otherwise have been allocated elsewhere.
So, I think we will escape the cataclysm, but more through technological luck than successful policy management.
Final note: This assumes minimal political good sense. That’s not always in evidence, most obviously from the Trump Administration in the US and its Australian allies, but, thankfully, neither of these look set to endure for long.
John Quiggin 
If the technology (presumably unstoppable) is all important and will save the day, why is everyone getting their knickers in a twist over Trump? And implementation of whatever was agreed at Paris.* And on a local level, Turnbull’s prevaricating, Abbott’s insurgency, Finkel, renewable energy targets, Elon Musk, what was said last night by some knucklehead on Sky News, whatever, whatever, whatever.
* Trump can say he is not bound by what his predecessor agreed. Ergodan has just said that Turkey aint implementing anything, even though he was there at Paris and agreed to everything.
@Smith
At most, all the noise is just a timing issue. Not a big deal in the scheme of things.
Sorry Prof John, I can’t share your optimism. There are too many sources of BAU in our economy; too many sources of inertia in our policy community; and too many biophysical forces at work that are vulnerable to positive feedback (and may well have already moved into accelerating territory). Your position with the CCA of course gave you access to first-rate policy analysis and first-rate science; so I hesitate to even question your optimism. But it remains to be proven that an industrial economy can be run on renewable energy, given the costs in materials and energy to aggregate dispersed forms. It is quite possible that generating and distributing enough energy to run the rest of society will exhaust our manufacturing and governance capacities.
A lot of change will be needed – to infrastructure, to patterns of population growth, to supply chains for food and other materials. For example, to run our transport or even a small proportion of it on renewable energy, we will need to electrify the fleet. We haven’t even started planning the necessary infrastructure, and in the meantime are committing billions of dollars to freeways. The disruption necessary could have been manageable if we had commenced 30 years ago, but it is now going to be forced on us by some climatic catastrophe, financial disarray, social disorder or some other disjunct. There is nothing in history to suggest that it will all turn out well in the end
Emissions have peaked. But there is no sign of a downturn. The three-year plateau, heading IIRC for a fourth, is a balance between a fall in coal and continued growth in oil and gas. I can’t see any of these three trends changing any time soon. Oil will grow until electric vehicles become a majority of new car sales, five to ten years from now. Gas is more vulnerable, as wind and solar are now cheaper in most places for new generation, they are always cheaper for old build, and the backup niche is now under threat from storage. My guess is that we won’t see a real emissions downturn before 2020.
It is amusing that the feature of wind and solar that opponents decry, their intermittency, is the one that is lethal to incumbent coal generators. Given the despatch priority that Econ 101 indicates, and most grid operators will choose left to their own devices, the variables drive the capacity factors of coal plants below their financial break-even points. This also splits the fossil opposition politically: gas is for now complementary to wind and solar, and the fall of coal is an opportunity for its vendors.
JQ: “I think we will escape the cataclysm, but more through technological luck than successful policy management.”
Give credit to the policymakers in a handful of countries who secured the essential subsidies for research, development, and high-cost early deployment of wind and solar. It’s not a long list, but Australia is there for solar, along with Japan, Germany, the USA, China, and Denmark. Japan and Germany have now dropped back, but they were both critical for solar at different times.
The UK is midwifing offshore wind to cost parity, for the bad reason of cowardice in the face of NIMBY and Fleet Street opposition to cheaper onshore wind. Spain has similarly been crucial for CSP in the past. California has midwifed the electric car, now joined by China: in both cases for air pollution reasons more than climate change.
(sorry for hogging the mike)
I share JQ’s optimism on keeping within the 2 degree limit. But the more prudent 1.5 degree one is now out of reach by mitigation alone – the total carbon budget will be gone in a decade. We are faced with the prospect of setting up massive net sequestration over half a century to get back to a safe GHG concentration. Apart from reafforestation (necessarily limited in scope), we don’t have the technology for this yet. And it’s not imaginable as a profit-making project, so it will need public funding. A carbon tax does the job until you near net zero, after which there are too few emissions left to tax. Gulags for denialist climate criminals might be emotionally satisfying revenge, but you can’t get useful amounts of slave labour from the Kochs, Tillersons, and Moncktons. Confiscation of assets perhaps?
Eelco Rohling, Professor of Ocean and Climate Change at the ANU, indicated in a seminar earlier this year that when all parameters are accounted for the minimum committed increase is already around 1.7 °C over pre-Industrial. That is, even if all carbon emissions stopped today, we’re already still going to come within 0.3 °C of the 2.0 °C limit. And every year that we continue to emit carbon will whittle this slim buffer…
…And the whole notion of a “buffer” is a distraction, because dangerous climate change will occur way before 2.0 °C. Heck, when it comes down to it, the 1.0-1.2 °C that has been realised thus far is now being accepted more and more by experts in the discipline as already having committed the Great Barrier Reef to effective destruction. The 1.5 °C that’s now effectively in the rear view mirror was probably the best landmark between bruising damage and worse – and to repeat it’s now in the rear view mirror.
We need all the positive technology that we can develop, but even the best outcome won’t alleviate the coming pain, and it certainly won’t prevent the biodiversity disaster* that’s already well in train. More than addressing the technology we need to address these latter points, and thus far the script for that is still sitting on the table.
[*If only the fact of ‘extinction debt’ was a serious economic concept…]
The technology that will enable us to survive is the technology of consensus. The idea of a distributed ledger is the idea of distributed agreement or consensus. Take a look at this short video on how honey bees come to a consensus. https://www.youtube.com/watch?v=abk-advcCIw
We can create electronic versions of honey bee consensus simply and easily. The technology is a more efficient way to set prices than markets and it can happen very quickly because we do not have to change any of our existing systems. Instead, we put a consensus layer on top of our existing economic system. Coming to a Consensus on loan terms is the basis of Crowd Lending. The approach takes the decision power on lending away from those who control capital and gives it to those who consume. https://medium.com/@kevin_34708/crowd-lending-85bdb0afe116
We are working on Crowd Lending to finance home solar panels and batteries that fits over the top of the existing solar panel industry. It allows people with roof space to find finance with Crowd Lending. The consensus is to give investors a guaranteed return and roof space owners power from the roof at a lower price than the grid.
We know solar panels supply power at low-cost today once we take away the cost of interest. Crowd Lending gives us one way.
We can use the approach to rapidly fund any technology once it is proven to work. We do not have to wait for governments or big business or venture capitalists to supply expensive money to fund technologies.
One obvious change to BAU has been in capital markets. Given the considerable lead times and competition with renewables conventional power stations don’t seem to be a good investment. Using politicians to tilt the playing field doesn’t seem to have worked as some don’t appear to have fallen into line.
The Chinese funded wind farm at Glen Innes has turned heads
Shorter John: Thank goodness that we have lucked out with a technological fix that at least partially offsets our political failure.
I agree with that but cannot resist pointing out that it represents a failed prediction by the “consumption is bad and we should all return to nature” lot, as well of course as the (far more powerful and more dishonest) “climate action will ruin our living standards” lot.
@derrida derider
We had a lot of Hanrahans who said we’ll all be rooned without a price on carbon. They didn’t say we’ll all be rooned without a price in carbon unless the technology comes to the rescue. The price on carbon was supposed to be an integral and irreplaceable part of the solution.
Julia Gillard’s career was terminated mostly because she said she would put a price on carbon and we all know the rest of the story. If it turns out that putting a price on carbon was just a nice to have optional extra because technology fixes everything anyway she will be entitled to conclude that she was the victim of bad advice.
i’ll do your BVs.
here is where we get into the quagmire called “property rights”
the Albany wave energy project under discussion between the company that builds it and the govt election commitment here in the west is a case in point.
anyway, i’m with JQ.
it’s happening.
but
the impetus toward renewables has jumped so many hurdles,dodged so many roadblocks and bullets,recovered from so many near death incidents and squeezed out from under so many thumbs the only question to my mind now is
who is going to get to own it?
@Smith I have generally, and in this case, found your comments unhelpful, borderline snarky, and usually based on an uncharitable misreading of my posts. You haven’t breached the comments policy and other readers may be interested in engaging with you, so feel free to keep commenting if you want to. But I won’t be responding to you any further.
JQ – “…advances in battery technology allowing both low-cost electricity storage and affordable electric vehicles.”
U.S. Automakers Grew EV Sales by 102 Percent in June…
https://robertscribbler.com/2017/07/05/racing-to-catch-ludicrously-fast-model-3-production-ramp-u-s-automakers-grew-ev-sales-by-102-percent-in-june/
https://www.tesla.com/en_AU/support/model-3-reservations-faq
JQ – “So, I think we will escape the cataclysm”
Cataclysm – meaning doomsday extinction event, or mere global calamity?
Who and where are the “we” in that? The over 60s? Australia? Without accounting for agw things already looked bad enough: http://dashboard.carryingcapacity.com.au/
Including agw climate change and the consequent amplifying geophysical events now in train, well, bets are off even on the over 60s here escaping unaffected. Calamity at the least has already begun…
https://robertscribbler.com/
https://robertscribbler.com/2017/04/26/key-heat-trapping-gas-crosses-410-parts-per-million-threshold-highest-level-in-past-5-20-million-years/
https://robertscribbler.com/2017/04/13/the-permafrost-is-thawing-20-percent-faster-than-previously-thought/ …&etc.
That is some good news i guess but a 67% prob of limiting warming to ~2 C implies a 33% prob of not doing so. Wagner and Weitzman, in “Climate Shock”, if i recall correctly, estimated a ~10% probability of ~6 C (or more) warming. This is scary.
If your want an example of a cheerful scenario, in 5 years autonomous cars could be widely accepted as being safer than the typical human driver. Half or more of electric car production could go into providing robo-taxis where each one replaces 10 privately owned vehicles. So well within 10 years oil use will plummet, the materials required to manufacture cars will plummet, city and town air quality will greatly improve, and road deaths will plummet.
The demand for transport services follows clear patterns enabling robo-taxis to charge off low cost wind power late at night and low cost solar power in the middle of the day. Of course, patterns could change. If jobs for meatbags dry up there will be no rush hour traffic.
I’m relatively optimistic that we’ll deal with climate change, what I’m not optimistic about is whether we’ll manage to deal with it in anything resembling an “easy” way – I forsee us getting to a point mid-century (or even earlier) when we finally realise we’re basically f*cked if we don’t get CO2 levels down to something like 350ppm /quickly/, and we have to put the whole world’s economy on a total war footing in a desperate attempt to get there. I’m confident that it’ll be technically possible to do that (I don’t think there’s any reason we /can’t/ make fusion power successful if we throw more money at the problems, and essentially unlimited energy makes a lot of things possible), but the economic and social disruption would make any of the current arguments about a few percent of GDP growth laughable.
@Simon Fowler
We don’t need anything so drastic. If we can hold concentrations below 435 ppm equivalent by 2050, and reduce CO2 emissions to (roughly) zero by then, reforestation (potential benefit 85 ppm by 2100) will get us back to 350 ppm.
http://onlinelibrary.wiley.com/doi/10.1002/2016GL068824/abstract
We can also get substantial reductions by reducing methane emissions. Since the residence time of methane is relatively short, a reduction in methane emissions by 2050 will lead to a corresponding reduction in concentrations by 2100.
@John Quiggin
Are we on a trend that would keep us that low by 2050, though? Going on the data from here: https://www.esrl.noaa.gov/gmd/ccgg/trends/global.html#global_growth it looks like we’ve got 15 years at most to stop emitting if we’re going to stay below 435ppm (and that’s just the CO2 numbers, not CO2 equivalent), and that data shows the growth rate trending /up/, not down. I’d like to be optimistic about this trend, but it really does look like it’s trending the wrong way. It’s good to know that reforestation has that kind of potential, though it’s pretty trivial compared to some of the runaway feedback mechanisms that we still don’t understand all that well (melting permafrost or methane clathrate releases, to name the two that make me most concerned).
Unfortunately I can’t access that article, so I don’t know if it answers my concerns.
In the Oz there is an account of Turnbull’s speech to the LNP up north where Turnbull says that opposition to coal is delusional. He then rakes over the coals of SA
This I find irritating, numerous expert bodies such as the AEMO found that SAs intermittency was due to adverse weather destroying parts of the grid leading to voltage fluctuations causing the wind turbines to switch off thereby overloading the Heywood interconnector. Apparently this switching mechanism has been adjusted so that there won’t be a repeat.
Still this leaves the grid which is complicated and somewhat shaky and needing proper investment to reduce waste and inefficiency.
Turnbull seems to be intent on turning back the tide.
My views align pretty strongly with this with one exception – I have grave doubts about whether we will phase out the consumption of beef and dairy anything like fast enough. It’s inspiring to see how rapid the progress is in producing synthetic meat, but it is still a hell of a long way behind electric cars, let alone PV.
Low emission concrete and solutions to air travel are similarly a long way off, but once the technologies exist they are likely to be adopted fast. With synthetic meat we’re going to have to get the stuff out there for quite a while before we get widespread adoption.
Still, if we manage everything else, meat alone may only push us over by half a degree or so, which would do terrible things to the planet, but not induce a world-ending event.
Not a surprise to Kurzweill!
on solar in 2011: “So right now it’s at half a percent of the world’s energy. People tend to dismiss technologies when they are half a percent of the solution. But doubling every two years means it’s only eight more doublings before it meets a hundred percent of the world’s energy needs. So that’s 16 years.”
Just Like John Quiggin 😉 When David Wallace-Wells speaks about ‘The End of the World,’ all hell breaks loose
Well, it had to happen sooner or later. A reporter in New York with a good track record of writing cogent, powerful essays on a variety of topics finally bored into the subject of global warming and the future of humankind. He said things will end in this century. Others replied that his ideas were “climate p**n.”
http://blogs.timesofisrael.com/when-david-wallace-wells-speaks-about-the-end-of-the-world-all-hell-breaks-loose/
If we magically reduced human caused CO2 emissions to zero tomorrow, over the next decade or so CO2 concentrations would fall by around 5% and over the next 90 years by about another 5%. So it’s not too late to stabilize under 400 ppm without doing anything to suck CO2 out of the atmosphere, but we’d better get a wriggle on.
Estimates for the half life of methane in the atmosphere vary. And also it quite literally varies from year to year and we don’t fully understand why. But even with a non-optimistic estimate of a 12 year half life, 50 years after humans cease adding it to the atmosphere it would be smashed down to almost pre-industrial levels. That would reduce anthropogenic warming by about 15%.
Hopefully human caused methane emissions have peaked or soon will.
So I think there are reasons to be optimistic about our greed and stupidity not killing nearly as many people as it could have.
Rog, thanks to lower fixed costs than in any state except WA and also due to off-peak hot water which is common in SA, typical households in South Australia has the second lowest cost of electricity of all the states.
This is very different from what the politicians say.
Mind you, this may need to be recalculated since electricity prices increased at the start of this month.
@Geoff Edwards
Haven’t started on electrification of fleet?
*42,000 U.S. charging stations on PlugShare (millions of outlets in garages)
*Tesla supercharger network has U.S. already +/- blanketed by end of year
*VW just now starting installs on $2,000,000,000 worth of charging infrastructure (https://www.electrifyamerica.com/our-plan)
@Simon Fowler
Nearly all articles can be accessed with Sci-hub Chrome app.
If only GHG concentrations were cooperating with those pretty curves. It makes one wonder about the accuracy of emissions reporting.
A more basic problem has been alluded to above, which is the lack of (mainly carbon) feedbacks being accounted for in the calculations underlying those curves (and a number of similar efforts).
In particular, they don’t include the 204 Pg C/2100 consensus permafrost estimate of Schuur et al. (2015). Why? Were CCA members even made aware of that? A potentially larger problem is that all other presently unquantifiable feedbacks (soil, boreal forests, tropical forests, some others) are assumed to be zero even though there are good reasons to think they won’t be. (FWIW this lack traces back to failure to include these feedbacks in CMIP 5 back in 2013. It could and should have been done using estimates, but I guess nobody likes unalloyed bad news.)
The permafrost and boreal forests are extremely vulnerable to fire. Fire in the latter is increasing, and more disturbingly fire in the former has undergone abrupt onset after having been absent during the Holocene (including during the warm mid-Holocene interval). Not to alarm anyone, but this has the potential to be the first step toward a hyperthermal. This boreal fire feedback may have already become a self-sustaining process (i.e. its own emissions being sufficient to keep it going regardless of whatever we do).
It’s very early days for the science on boreal fire trends, but this video is informative. Probably the key question is return period for the fires, and early indications from the first big tundra fire (Anaktuvuk in 2007) is that regrowth is going very well (normally a good thing, but in this case it points to earlier reburning; that’s important because repeated burning accesses deeper and deeper carbon).
Fires need ignition sources, and the lack thereof is probably what prevented tundra fires in the past, but unfortunately lightning is moving north with warming. See also this post from the folks surveying the Anuktuvuk fire aftermath this summer; that big thunderstorm was practically over the Beaufort Sea.
It’s not clear boreal feedbacks are even necessary to lighting off tropical biomass (fire once again), but they’ll certainly speed the process way up; if that does happen in turn we’re on our way to a hyperthermal (with some lag since the oceans have to warm enough to trigger a self-sustaining loss of shallow methane hydrates). Before we even see the hyperthermal starting, the tropics will become uninhabitable. Eocene-like baseline conditions are quite enough for that.
Did someone mention we’re in a climate emergency and need a WW2-scale mobilization ASAP?
AEMO publish price data – I presume that these prices are wholesale.
https://www.aemo.com.au/Electricity/National-Electricity-Market-NEM/Data-dashboard#average-price-table
@Stephen Luntz
A couple of observations on methane from cows
1. Some recent research suggests that the problem could be solved at minimal cost by adding seaweed to the diet of cattle and ruminants
http://www.abc.net.au/news/rural/2017-04-21/seaweed-fed-cows-could-solve-livestock-methane-problems/8460512
2. We could always switch to eating chicken. Not something that would happen by moral suasion alone, but it would scarcely be equivalent to imposing martial law.
Rog, those are wholesale spot prices, which tend to average a little above the actual average wholesale price of electricity. We don’t know the actual average wholesale price of electricity. It is a secret.
Looking at the average wholesale spot price for June for the National Electricity Market the states in order of most expensive to least expensive are SA, TAS, VIC, NSW, QLD.
Victoria normally has the lowest average wholesale spot prices due to their brown coal capacity, but that’s not the case at the moment.
Methane production in ruminants is a sign of digestive inefficiency. So decreasing the amount of methane they produce should improve feed conversion efficiency and so could be an improvement that pays for itself even without considering climate benefits.
But even if methane production from ruminants can’t be eliminated, there is still no need for monstrous humans to stop eating the flesh of cattle animal slaves, provided they pay the cost of removing the greenhouse gas emissions that result from the atmosphere. If this costs $100 per tonne of CO2 and producing one kilogram of beef currently results in emissions equal to 13 kilograms of CO2 equivalent, then that would add $1.30 to the cost of a kilogram of steak.
If it is easy to cut emissions from beef production by half, then that would cost 65 cents per kilogram. While those who consume the flesh of cattle might prefer no increase, no one who can afford 19.5 cents per 300 gram steak will have to go without beef if they don’t want to.
Note – This assumes world climate at least resembles what it does today. If things get out of hand cows will die across a large portion of the planet. It’s a heat stress thing. The good news is humans are more heat resistant than cows, so outlasting cows is something some of use can aspire to.
@Ronald B Given the variables it’s difficult to prove, or disprove, politicians and var media entities’ statements on energy prices.
On another tack, our own bills attract a discount of ~22% if we pay by the due date. This makes me think that the rates given in the invoices are
a) inflated by an amount equal to the “discount”
b) the energy provider is making a large profit from cash flow
b) the energy providers’ main business is not energy
Rog, it is easy in the sense that it can be done given a bit of effort and definite answers can be arrived at. If Prime Minister of a country can’t be bothered to sit down with a pad and pencil for a few hours and work it out, then that is rubbish.
Actually, the Prime Minister could probably get someone to work it out for him. If he doesn’t even have to spend the time working it out himself, but still can’t be bothered to find out whether he is talking rubbish or not, then that is rubbished cubed.
The reason why your electricity bill has a discount of 22%, which most likely applies only to the GST exclusive marginal cost of electricity, is to deliberately make your electricity bill more confusing.
Currently about 40% of the price of electricity is retailing. In this age of computers that can add up whole columns of numbers without human intervention, 5% might be enough if states simply supplied electricity, as they used to.
@Geoff Edwards
The green car myth
How government subsidies make the white elephant on your driveway look sustainable
…One company that has benefited enormously from these policies is Tesla. In 2008, Tesla applied for a 465 million dollar loan from the Federal government. This allowed Tesla to produce its car, which then allows Tesla to raise 226 million in an IPO in June 2010, where Tesla receives cash from investors willing to invest in risky ventures as a result of central bank policies. A $7,500 tax credit then encourages sales of Tesla’s Model S, which in combination with the money raised from the IPO allows Tesla to pay off its loan early.
In 2013, Tesla then announces that it has made an 11 million dollar profit. Stock prices go through the roof, as apparently they have succeeded at the task of the daunting task of making green cars economically viable. In reality, Tesla made 68 million dollar that year selling its emission credits to other car companies, without which, Tesla would have made a loss.
Tesla in fact receives $35,000 dollar in clean air credits for every Model S that it sells to customers, which in total was estimated to amount to 250 million dollar in 2013.4 To put these numbers in perspective, buying a Model S can cost anywhere around $70,000, so if the 35,000 dollar cost was passed on to the customer, prices would rise by about 50%, not including whatever sales tax applies when purchasing a car.
We can add to all of this the 1.2 billion of subsidy in the form of tax exemptions and reduced electricity rates that Tesla receives for its battery factory in Nevada.5 The story gets even better when we arrive at green cars sold to Europe, where we find the practice of “subsidy stacking”. The Netherlands exempts green cars from a variety of taxes normally paid upon purchase. These cars are then exported to countries like Norway, where green cars don’t have to pay toll and are allowed to drive on bus lanes.6
For freelancers in the Netherlands, subsidies for electrical cars have reached an extraordinarily high level. Without the various subsidies the Dutch government created to increase the incentive to drive an electrical car, a Tesla S would cost 94.010 Euro. This is a figure that would be even higher of course, if Dutch consumers had to pay for the various subsidies that Tesla receives in the United States. After the various subsidies provided by the Dutch government for freelance workers, Dutch consumers can acquire a Tesla S at a price of just 25,059 Euro.7
The various subsidies our governments provide are subsidies we all end up paying for in one form or another. What’s clear from all these numbers however is that an electric car is currently nowhere near a state where it could compete with a gasoline powered car in a free unregulated market, on the basis of its own merit.
The image that emerges here is not one of a technology that receives a gentle nudge to help it replace the outdated but culturally entrenched technology we currently use, but rather, of a number of private companies that compete for a variety of subsidies handed out by governments who seek to plan in advance how future technology will have to look, willfully ignorant of whatever effect physical limits might have on determining which technologies are economically viable to sustain and which aren’t.
After all, if government were willing to throw enough subsidies at it, we could see NGO’s attempt to solve world hunger using caviar and truffles. It wouldn’t be sustainable in the long run, but in the short term, it would prove to be a viable solution to hunger for a significant minority of the world’s poorest. There are no physical laws that render such a solution impossible on a small scale, rather, there are economic laws related to scalability that render it impossible.
Currently South Australia is exporting around 600 megawatts and at around 3 am EST the price of electricity is expected to go negative as SA demand falls around 400 megawatts below what it is now and presumably the state will be producing more electricity that will consume and can export. I don’t think that’s happened for a while. Since the Heywood interconnector’s capacity was increased SA has generally been able to export any excess renewable power it produces.
I don’t think negative pricing would be happening if the state wasn’t now required to have two large gas generators operating at all times, by order of the Premier. This is driving up electricity prices in the state and rewarding gas generators the state government wants to punish for not maintaining supply by transferring large amounts of money to them.
I’m not sure they’ve thought this through.
Svante, it’s a great thing that Tesla is charging around the same price in Australia as they do in the US for the Tesla S where subsidies to electric car makers consist of bugger plus all. I’m going to take this as a clear admission by Elon Musk that Australians are just sexier and more deserving than people’s elsewhere.
@Svante
Subsidies are just money – the only reason to worry about them is if they’re distorting people’s behaviour in ways we don’t want to support. Buying electric cars is very much something we /want/ people to do, and hence throwing money at them is a good idea. If that results in misallocation of resources we should review the subsidies, but at the moment they appear to be fixing some of the current misallocation of resources towards fossil fuels, so they’re a good thing.