Month: August 2019

What price nuclear power ?

John Quiggin34 Comments

As I mentioned a while ago, the Standing Committee on Environment and Energy of the Commonwealth Parliament is inquiring into the prerequisites for nuclear energy in Australia. There’s a similar inquiry happening in NSW.

All the evidence suggests that this isn’t serious exercise. Rather it’s something intended to appease the National Party or troll the Greens, depending on where you are coming from.

Still, it’s a Parliamentary inquiry on an important issue, so I decided to take it at face value and make a submission. My central recommendation is a combined policy

  • Introduce a carbon price, rising gradually to $50/tonne of CO2
  • Repeal legislative bans on nuclear power

I’m pretty confident this package will have close to zero supporters in Parliament, but it ought to appeal to two groups.

First, anyone who seriously believes that nuclear power should be adopted as a response to climate change. That’s a small, but non-empty set, since most nuclear fans are climate deniers. But for those people, it should be obvious that nuclear power is never going to happen except with a carbon price high enough to wipe out coal, and compete with gas.

Second, renewable supporters who want action now, and are prepared to give nuclear a chance in 15-20 years time if it’s needed. The carbon price would push a rapid transition to solar PV, wind and storage, and would be neutral as between these technologies and nuclear. On present indications, that would be sufficient to decarbonize the electricity supply at low cost. But if a fixed-supply technology turned out to be absolutely necessary, one or two nuclear plants might possibly happen.

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Jimmy Carter gets advice about global warming

John Quiggin10 Comments

A commenter at Crooked Timber just made the often-repeated claim ““Forty years ago (1970’s) global cooling was all the rage!””. As it happens, just before reading this comment, I received a link to some files from the Jimmy Carter Presidential Library and Museum. It’s a daily log or similar, and starts with a response to someone named Frank Press who had written to Carter raising concerns about CO2 emissions and global warming. The advice given to Carter was as follows:

The issue raised by Press is not new. The experts all agree that more infor­mation is needed. The energy plan indicates that nearly $3 million was being requested for ERDA to study the long-term effects of co2. (James) Schlesinger feels that the policy implications of the issue are still too uncertain to warrant presidential involvement or poli­cy initiatives. Schlesinger is examining the issue in the preparation of the FY 79 budget, and will, at that time, have the full report of the NAS study and further results from ERDA.

That accords with my memory, but not, apparently that of numerous others. Both warming and cooling were discussed in the 1970s, but there wasn’t clear evidence either way. By the 1980s, it became clear that the trend was towards warming, though it took another decade or so to produce broad scientific agreement that greenhouse gas emissions were the most likely cause and another decade for this agreement to reach near-certainty.

It’s interesting that this spurious history came up in response to my suggestion that over-60 voters, as a group, don’t display the wisdom and experience that’s used, with reference to the presumed lack of these qualities, to justify excluding children from voting. Anyone now over 60 was old enough to vote in the late 1970s when this discussion was taking place. It might be expected that, even if they weren’t following closely, they could recall the absence of any major scare over global cooling and debunk the claim that there was one.

Instead, over 60s seem to be the most prominent in pushing this theme. In part, they appear to have false memories (like visiting Disneyland and seeing Bugs Bunny) assisted by the circulation of a fake Time cover, notably by Ted Nugent (age 71).

The problem of convenient forgetfulness isn’t confined to the current 60+ cohort, or to events that happened decades ago. Ben Shapiro, who appears to be the nearest approach to an enfant terrible to be found on the political right, recently claimed that no prominent Republican had denied Obama’s legitimacy as president, apparently forgetting that the current president was a leading advocate of birtherism (Trump wasn’t alone in this).

But the prevalence of false political memory is a powerful counter to any claim that young people should be disqualified from voting because they are poorly informed. As Mark Twain didn’t say “It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.”

Another High Court disaster, coming up ?

John Quiggin46 Comments

Unsurprisingly, the rejection of Cardinal Pell’s appeal against his conviction for sexual abuse has led to the expectation that the case will go to the High Court. As far as I can tell, there are quite a few bad reasons for the High Court to take the case, but no good ones.

The bad reasons (all related to each other) are

  • Cardinal Pell is an important person
  • He is strongly backed by other important people
  • There is a lot of public interest in the case

What is missing is any legal issue raised by Pell’s conviction. The Appeal Court unanimously rejected suggestions that the trial judge made errors in his directions. The central remaining issue is whether the victim’s evidence was sufficiently credible to make it open to a jury to bring in a guilty verdict or whether the evidence of a defence witness, Portelli should be preferred.

Not having seen the evidence, I have no independent opinion. But the jury brought in a unanimous verdict, and two out of three Appeal court judges found that it was reasonable to do so. Is there any reason for the High Court judges, appointed primarily for their supposed expertise in constitutional law, to think they can do a better job of judging the case? If this appeal is heard, why not every criminal case where the Appeals Court produces a majority decision?

If the Court capitulates to political pressure by deciding to take the case, how will its verdict be viewed? An acquittal would certainly look like more of the same. Upholding the conviction would open them up to more attacks from the right. Then there’s the possibility of a split decision, unusual from this Court in high profile cases. That would really cause trouble.

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Cutting the financial sector down to size

John Quiggin11 Comments

That’s the provisional title I used for my latest piece in Inside Story. Peter Browne, the editor, gave it the longer and clearer title “Want to reduce the power of the finance sector? Start by looking at climate change”.

The central idea is a comparison between the process of decarbonizing the world economy and that of definancialising it, by reducing the power and influence of the financial sector. Both seemed almomst impossible only a decade ago, but the first is now well under way.

There’s also an analogy between the favored economists’ approach in both cases: reliance on price based measures such as carbon taxes and Tobin taxes. Despite the theoretical appeal of such measures, it looks as if regulation will end up doing much of the heavy work.

Economics in Two Lessons, reviewed

John Quiggin2 Comments

A couple of reviews of Economics in Two Lessons have come out, from opposite ends of the political spectrum. The more interesting is Max Sawicky’s in Jacobin.

Sawicky does a great job in summarising the key ideas in the book. His is probably the best review so far for non-economists to get an understanding of the main themes.

Given the Jacobin audience, the key question is “Why should a socialist read a book about markets?” As Sawicky observes, the answer is easy for socialists in the Bernie Sanders mould – I share their views, a fact that is obvious to readers of this blog.

More generally

Quiggin’s deconstruction of Hazlitt’s “Lesson One” provides a lesson in “know your enemy” for anyone left of center. If your only instruction in economics was a principles course, this book provides an essential completion of the basic story.

More generally, Sawicky says

If your hostility to markets runs more deeply, then the mainstream theory elaborated by Quiggin provides a useful challenge.
What becomes deemphasized, when it is not glossed over entirely, is, on the one hand, the proliferation of “externalities” that bind together the interests of ostensibly disparate individuals, and on the other, our capacity (historically demonstrated) to respond effectively on a cooperative, collective level.
Economics as practiced by progressives pursues these insights, but, as I think Quiggin would agree, it has further to go. His “second lesson” is a crucial step in this journey.


I’m very grateful for this review, which gives me food for thought as I think about my next big project.

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