Month: April 2019

Half right, and all left, on coffee

John Quiggin15 Comments

Back in the Paleozoic era of blogging, I wrote, in relation to a prediction that latte drinkers would soon be in the majority

I would view this prospect with horror, but I think it will not come to pass. Latte is the Cold Duck of the 21st century, and like Cold Duck will be shaken off with a shudder as people realise what real coffee is about.

Recent research from the Australia Institute suggests I was, at best, half right. Latte drinking hasn’t become the norm but it has survived, while real coffee (short black) remains such a minority taste that it has to be lumped in with the watered down long black.

The good news, (that is, the news that confirms my prejudices) is that latte drinkers are more likely to be LNP voters than anything else. The same is true, though only marginally, for chardonnay.

Shorten gets opportunity cost right

John Quiggin32 Comments

The concept of opportunity cost “The opportunity cost of anything of value is what you must give up so that you can have it.” is the central theme of my book Economics in Two Lessons, due out in the US on 19 April and hopefully in Australia soon after that. My central claim is that two lessons based on opportunity cost and their relationship to market prices provide a framework within which almost any problem in economic policy can usefully be considered.

That’s not the way economics is usually taught (opportunity cost gets a brief nod before the focus moves on to supply and demand). So, I was impressed to see Bill Shorten use the term in relation to climate change inaction. Not only that but he used it correctly! Here’s Bill, quoted in the SMH

Opposition Leader Bill Shorten defended the new policy by urging voters to consider the cost of inaction on climate change, saying “There is a huge opportunity cost when we don’t take action,”

Perhaps I shouldn’t be surprised. Labor’s Shadow Assistant Treasurer is Andrew Leigh, a fine economist who has had nice things to say about my book. And Labor has been listening to Richard Holden, who is, I think, the brightest young economist we have right now.

Surprising or not, it’s great to see a return of economic literacy to public debate, after years dominated by vapid slogans.

Climate instant reax

John Quiggin20 Comments

The Australian Science Media Centre provides responses from scientists and other experts (including me as an economist) to news releases about science-related issues, including climate. A couple of recent examples;

A very quick response to Labor’s climate policy. My take

“As an oil importing country with no domestic car manufacturing industry, Australia is well placed to make the shift to electric vehicles proposed by Labor. A crucial step towards this goal will be the restructuring of the National Electricity Market, and the design of charging infrastructure to encourage flexible recharging of electric vehicles to match peaks in the availability of renewable energy.”

and one on the very depressing Global State of the Climate Report, where I said

“Following the depressing news from the International Energy Agency that global CO2 emissions rose to a record high in 2018, the WMO report confirms that severe impacts of climate change are already being felt.  This scientific analysis only confirms what is evident to anyone who examines the evidence with an open mind: the global climate is changing in ways that are unprecedented in human experience. Sadly, many of our leaders do not have an open mind. Rather, they are committed to denying the findings of climate science at any cost, in order to defend sectional economic interests and backward-looking identity politics. Australia in particular needs urgent action to achieve substantial reductions in emissions over the next decade.”

Return of Adani’s big yellow grader

John Quiggin8 Comments

Adani’s chief executive Lucas Dow is yet again claiming that the company is “ready to go” with the Carmichael mine, as soon as the government approves it. As usual, we get a picture of Adani’s fleet of heavy earthmoving equipment, consisting of one big yellow grader.

Adani’s $2 billion at work

At least the journalist visiting the site shows a bit of scepticism this time, noting that Dow’s claims that he could start today, made while standing next to a 5-metre wide strip of cleared scrub, require a bit of imagination.

Just for fun, I thought I’d work out how much of Adani’s supposed $2 billion budget is being spent on this piece of theatre. From what I can see, graders like the one in the picture can be hired for $1-2000 a day, which would give a total of at most $250 000 since the latest go-ahead was announced late last year. I imagine Lucas Dow could just about finance that out of his pocket, without needing to call on Mr Adani’s much greater resources.

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