A couple of years ago, I published an article on why “extremely unlikely” climate events matter. The central point was that climate outcomes with a probability of 5 per cent or less (“extremely unlikely” in IPCC terminology) were still much more likely than risks we take seriously in our daily life, like dying in a car crash). As an illustration, at the time the piece was written, it seemed less than 5 per cent probable that, within two years, many countries in the world (including Australia) would see catastrophic fires on the scale of those that have actually happened.
I made this point in an interview for an ABC story on economists’ views of the likely costs of 3 to 4 degrees of climate change. Most of those interviewed agreed with me that the costs were likely to be much higher than suggested by economics Nobelist William Nordhaus (with whom John Horowitz and I had a debate in the American Economic Review quite a while ago). We pointed out, among other problems, that a paper he had co-authored implied an optimal July temperature of -146 degrees Fahrenheit.
Nordhaus declined an interview, but his viewpoint was represented by Richard Tol. Longstanding readers will remember Tol as a commenter here who eventually wore out his welcome.
The other point I made in the interview was that the abstruse debate about discount rates central to much of the debate between Nordhaus and Nicholas Stern has turned out to be largely irrelevant. The premise of that debate was that the costs of unmitigated climate change would be felt decades into the future while the costs of mitigation would be immediate.
As it’s turned out, the costs of climate change have arrived much sooner than we expected. And the only mitigation options adopted so far have been low cost or even negative cost choices like energy efficiency and abandoning coal (more than justified by the health costs of particulate pollution).
That doesn’t mean discount rates are completely irrelevant. If we manage to decarbonize the global economy by 2050, benefits will keep accruing well after that. But even if we stopped the analysis at 2050, we would still have a substantial net benefit. The likely cost of near-complete decarbonization now looks to be less than a two per cent reduction in national income. Reducing the frequency and severity of disasters like the bushfires will more than offset that.
John Quiggin 
“As it’s turned out, the costs of climate change have arrived much sooner than we expected.”
Didn’t Garnaut say in 2008 that bushfires would be much worse by 2020?
“Didn’t Garnaut say in 2008 that bushfires would be much worse by 2020?”
Yes, apparently he (or someone) did in that report. I say ‘or someone’ coz I struggle to imagine how one man can create that report on their own 🙂 it was like a phone book IIRC full of data and analysis. Truly impressive prediction though. Even Nostradamus would’ve dipped his hat…
Speaking of 5% risks, with the latest-ish news from Antarctica about Thwaites Glacier we may have to revalue (current) waterfront property much earlier than anticipated. That may well draw the attention of the voters where even bushfires don’t. Perhaps Smoko will try a Cnut “pray the tide not rise”? Maybe we will finally see the end of “a rising tide lifts all boats” metaphors for the housing market?
Just for the record, a rising sea level does *not* lift houses.
http://www.digitaljournal.com/news/environment/scientists-want-to-know-why-thwaites-glacier-is-melting-so-fast/article/565214
One rather scary and (for me) unanticipated side effect of climate change is that it might mean the end of plantation logging, or at least it will become geographically restricted.
If you are looking at 30 years from planting to harvesting, and your probability of being burned out in any one fire season is 1%, then your probability of harvesting a crop is 74%. At 1.5% it is 64%, and at 2% it is 55%.
If climate change increases the risk of bushfires (and it seems likely it does), then there will be some actuaries doing calculations and telling tree plantation investors, “No, we can’t insure you.”
Speaking of related issues, this:
https://www.abc.net.au/news/2020-01-16/company-approved-to-take-water-in-drought-ravaged-queensland/11873394
I am puzzled how the Drum tv show could have avoided asking the mayor of Stanthorpe, on the panel for the show, how Joyful View could get away with withholding water from Stanthorpe last night, or why the other presenter, was so desperate to prevent Cheryl Kernot from raising the issue of water policy the night before. She said it would be discussed by Fanning last night, yet THE most obvious question was ignored.
Some body- anybody- help me out with this.
Nordhaus et al argue that the higher end IPCC scenarios are scaremongering and the more moderate model is more likely. But it just doesn’t matter, even the lower end of IPCC projections is more than enough.
I don’t get their perspective, maybe it’s the terminology they use.
Every temporary win for delay raise the chances that when action does come, it will take an authoritarian socialist form. People have forgotten what a war economy looks like – both in terms of production (American factories made 96,000 military planes in 1944, each more complex than a wind turbine) and in loss of personal freedom. The men who objected to Henry Kaiser’s plan to build a Liberty ship in 5 days were probably shown the door. The men who objected to Kruschev’s plan to ship Ukrainian factories behind the Urals in the autumn of 1941 probably joined the machine tools on the tracks to Siberia. That’s if they were lucky.
https://cleantechnica.com/2020/02/05/worst-case-climate-change-scenario-is-scary-but-the-reality-could-be-even-worse/
James – the men who objected were told to shut up and get machining. The men who tried to stop it were arrested (see CEO of Sears Roebuck being carried from his office by federal agents). Wealth was confiscated, country homes turned into training grounds and – oh horror for many Americans – coloured people got off the plantation (odd fact – in 1941 people gave up space on a train evacuating workers and factories to the east for the contents of the Turgenev museum).
@ akarog February 6, 2020 at 8:38 pm
Nordhaus et al argue that the higher end IPCC scenarios are scaremongering and the more moderate model is more likely.
And they are wrong. The Thwaites Glacier study seems to support this. I have not been keeping count but my impression is that on sea-rise the IPCC consistently low-balls things. I
Nordhaus et al. seem to have failed to consider little things like devastating fires in Australia, the US and less drastic but still massive fires in Canada and Russia and these are not Taleb-type Black Swans (presumably White Swans to Australians), but perfectly predictable.
I have not read Nordhaus et al.’s paper just some critiques but I get the impression a lot of the work assumes linearity and that assumtion is long passed its sell date.
“The likely cost of near-complete decarbonization now looks to be less than a two per cent reduction in national income.”
I’m curious as to where the rather high 2% comes from.
The last IPCC report on costs dates from 2014 (5th Assessment Report, WG3). Key graf (pdf https://www.ipcc.ch/site/assets/uploads/2018/02/ipcc_wg3_ar5_summary-for-policymakers.pdf, page 16):
:… Scenarios in which all countries of the world begin mitigation immediately, there is a single global carbon price, and all key technologies are available, have been used as a cost-effective benchmark for estimating macroeconomic mitigation costs […]. Under these assumptions, mitigation scenarios that reach atmospheric concentrations of about 450 ppm CO2eq by 2100 entail losses in global consumption – not including benefits of reduced climate change as well as co-benefits and adverse side-effects of mitigation – of 1 % to 4 % (median: 1.7 %) in 2030, 2 % to 6 % (median: 3.4 %) in 2050, and 3 % to 11 % (median: 4.8 %) in 2100 relative to consumption in baseline scenarios that grows anywhere from 300 % to more than 900 % over the century. These numbers correspond to an annualized reduction of consumption growth by 0.04 to 0.14 (median: 0.06) percentage points over the century relative to annualized consumption growth in the baseline that is between 1.6 % and 3 % per year.”
This is certainly a massive overestimate of costs:
– the IPCC team overestimated the feasibility of coal CCS, but this is more than outweighed by a massive underestimate of the fall in costs of wind, solar and batteries;
– they inexplicably made no attempt to factor in avoided climate damage from say (to take a wild speculation) catastrophic bushfires in Australia;
– they ignored avoided health costs entirely. In the same year the OECD estimated the GDP health damage from outdoor air pollution, mostly from vehicles, as $3.5 trn *a year*, based on a WHO estimate of 3m premature deaths annually (since raised to 4.2m). This was just for OECD countries plus India and China, leaving out the not insignificant populations of Indonesia, Brazil, Pakistan, Bangladesh, etc. https://www.oecd-ilibrary.org/environment/the-cost-of-air-pollution/summary/english_9789264210448-sum-en
All the more recent modelling (Jacobson, Breyer, Teske, Blakers for Australia) that I’ve come across gives IIRC no net GDP costs without health and climate damage, and big GDP savings with them in.
The picture is complicated by the recent switch to a more ambitious 1.5 degree target and a consequent acceleration in the timetable. This means that a large volume of investment has to be brought forward and crammed into the current decade. This is a cost if you use a high rate of discount, but otherwise so what. It does involve a modest opportunity cost against waiting for the key technologies to become cheaper. This no longer matters for electric generation, where renewables-plus-storage is already cheaper, but it makes a difference on batteries for electric cars, trucks and planes. However, most of the price drops come from economies of scale and learning, tied to the volume of deployment not its timing.
Peter T: Google says it was Montgomery Ward rather than Sears, but thanks anyway for the tip, also for Turgenev. https://www.history.com/this-day-in-history/fdr-seizes-control-of-montgomery-ward
Yes James W . As someone once said – does anyone doubt that humanity would transition to renewables within 2 or 3 years if aliens came and stole 3/4 of remaining fossil fuels last night ?
I am not sure the “worst case” is happening. Maybe it is but I don’t know. The current events will, regardless, drive increased community awareness and concern over climate change. That is useful.
Worst case scenarios:
“My dear Professor Kingsley, I fear you underestimate us. You may rest assured that when we make our plans we shall prepare for the very worst that can possibly overtake us.”
Kingsley leaped.
“Then you will be preparing for a situation in which every man, woman, and child will meet their death, in which not an animal, nor any plant will remain alive. May I ask just what form such a policy will take?”
Fred Hoyle, The Black Cloud
The costs of transition to an ecologically stable state are hard to estimate. For one thing, we count repair and re-building as a gain, and most of our built infrastructure is not on the books at all (minor illustration – the Himalayas are covered with a network of paths, stone where needed, banked, provided every few hundred metres with benches to rest loads – built over centuries, not monetarily valued at all. Now look around at every “improvement” made since people arrived and ask how much is assigned a monetary value). A very large chunk of this will have to be abandoned, re-built or moved.
Energy is crucial, but so is plastics, native animals, insects, water, nitrogen overload, soil depletion. For some we have more time, some we are well into damage limitation. It is naive, however, to think that the costs are not substantial or that we collectively will not be poorer materially. The comparison with war is apt – the alternative is not riches but death.
@Peter Thomson As you suggest, it’s common to count repair and rebuilding as a gain, but “we” here at johnquiggin.com don’t do that. I’m always careful to refer to (net) national income not to GDP, as in the post above. Most recently, I made this point in relation to the bushfires https://johnquiggin.com/2020/01/15/economic-estimates-dont-account-for-tragic-bushfire-toll/
JQ, Fair point.
As McPherson said yesterday on why nature will bat last, on why we’re heading towards a (total) mass extinction event like none before: “It’s the rate of change!”
https://guymcpherson.com/2020/02/extinction-dialogues-i-agree-except-for-the-part-about-earth-as-a-ball-of-ice/
Global cooling after nuclear war would harm ocean life
Seafood production also may be impacted by increased acidification
https://www.sciencedaily.com/releases/2020/02/200205084201.htm
Date:February 5, 2020
Source:Rutgers University
Summary:A nuclear war that cooled Earth could worsen the impact of ocean acidification on corals, clams, oysters and other marine life with shells or skeletons, according to the first study of its kind.
We are now seeing the climate denial argument shift from outright denial, implemented with Fear, Uncertainty and Doubt (FUD), into pretended sensible reason based on Mollify, Adapt and Delay (MAD). You will notice that any serious attempts at mitigation (real reductions of CO2 emissions are still to be left out of the mix. Scott Morrison is subtly changing his argument now that outright denial has become untenable. Instead it is Mollify, Adapt and Delay (MAD).
First, pacify and assuage the anger of the public with lots of soothing words, promises of action and a little bit of government money. Remember, as Prof. J.Q. said, the few billions being promised are very little when the true losses and reconstruction costs are more like an estimated $100 billion, and still counting. Then, Morrison insists that adaptation is the first priority because the problems are happening right now, which is true in itself but is emphasized out of its true context. Finally, make out that mitigation won’t make any difference for now, (which is not true in the full context because CO2 mitigation right now immediately reduces direct fossil fuel pollution, CO2, particulates etc. which hit city-dweller’s lungs right now.
This overall argument strategy by Morrison pushes mitigation down to the very lowest priority. This permits more indefinite burning of lots of coal which is what Morrison and his backers want because that is how they respectively get their political donations and make their money. It remains a delay strategy even after outright denial becomes impossible.
This approach is very dangerous and if we follow it we will collapse, nationally and globally. It is now an emergency and it requires all possible adaptation AND mitigation attempts to be made concurrently. Adaptation and mitigation are not in overall competition for funds because they are synergistic programs together. Adaptation and mitigation undertaken together and designed to reinforce each other will be much more effective and produce much better results for cost (both money and resource costs) than either adaptation or mitigation alone.
Let us hope the public see through the dishonesty of Morrison and his government. Let us hope they do not “hearken to his glozing lies.” *
* Milton referring to Satan. Appropriate in this context, I think, as we face hell on earth if we do not change course.
https://www.greenpeace.org/usa/global-warming/climate-deniers/koch-industries/
I have spent a couple hundred hours conversing with Trump loving American Christians over the past 15 months, on Twitter and YouTube. Most of them don’t give a rat’s about global warming. Many of them think Jesus will return soon and welcome death and destruction including AGW because they see it as a sign of the end times. I’m not sure we can get through to these people.
They exist here as well of course and are more common than is generally accepted.
Admission: “Sure it is getting warmer, I remember what it it was like when I was growing up (read “little fella” if you are Scotty from Marketing)”.
Submission: “Only God can make the earth warmer so the changes must have a divine purpose”. Hands turned out in supplication: “What can you do?” Indeed!
not much point at all trying to start survival thinking in the awareness of true believers who are actually praying for the “end-of-the-world”.
they are convinced they will be better off dead.
John Kane, dead right.
The Thwaites Glacier will fix ’em.
As for no or little climate change, if that’s the case, why this indecent, furtive scramble for water rights globally unless well informed tycoons know something we don’t in our info vacuum, as to enviro degradation and climate change?
These business people also seem increasingly sceptical of fossil fuels as a good investment, but may it is because they don’t to become fossils tjhemselves, material for the next oil boom in forty million years after the Great Extinction, when a new species of Ape has conquered the world.
JQ: If your 2% high estimate of the net cost of the transition uses NNI rather than GDP, it looks even more of an outlier. No question that it’s a less imperfect metric, as it forces you to account for at least some forms of climate damage (burnt buildings and commercial forests, say).
Once again, a slight digression re a climate change and economics-related issue:
https://www.abc.net.au/news/2020-02-07/murray-darling-basin-dispute-over-northern-irrigators-flood-flow/11942610
@-JQ
“Reducing the frequency and severity of disasters like the bushfires will more than offset that.”
Decarbonizing will arrest the warming. The severity and frequency of bushfire disasters will remain at the current level.
Only CO2 capture to reduce the atmospheric level will reduce the severity and frequency
Izen: Both of you are right. Mitigation starting now will teduce the damage from bushfires *compared to current policies.* But to reduce the absolute level, yes, we need large-scale sequestration.
For global heating the next stage in the right wing ratchet is – ‘oh well, its too late to stop it now anyway’ .
May,
“… they (apocalyptic and rapture christians) are convinced they will be better off dead.”
They are welcome to accelerate their own deaths in ways which do not accelerate mine.
JQ well me recall Stern then Garnaut but I still am of the view that the costs, not of decarbonisation and change to economic activity and our highly fossil fuel dependant way of life but of inaction are worse than anticipated. The variability of climate and slowly rising global and local temperatures have significant as yet uncalculated costs for the loss of flora and fauna and the damage to the functioning of all ecosystems as a result. If the environment takes a large impact, their may have been little immediate capital loss but the costs are obvious – plant health and plant productive capacity decreases. Emeshed and coindependant insect and microbiobial systems are damaged. Shifting temperature regimes and shifting precipitation patterns incurr reduced output from all natural systems and agricultural systems. In short, we get less and the less becomes marginally unproductive to produce because we have to substitute inputs such as fertiliser and water by transportation or storage systems. The destruction of forests and flora means that carbon capture and natural storage systems are diminished which in turn means the data of carbon reduction outcomes is immediately decreased or carbon transfers to the global atmospheric and ocean systems increases no matter neutralising the carbon reductions we thought we had achieved. To my mind there is no longer any alternative but to now and very very soon, that is within 12 months or one earth solar transit to reduce all human activity that generates carbon or other green house gases by 25%. The problem is does economic theory have the capacity to reimagine and recast the endless growth paradigm into a workable constant reduction theory. I know our political and social systems may or may not cope but either way, theoretical or not, rapid and immediate decarbonisation is the only thing that will save homo sapiens and most of the living things on this planet from being transferred from the “fittest” to the ‘least fitt to survive”.
WRT “unlikely” and the qualifiers of very, or extremely etc.
If the projected global rise in temp is, for arguments sake, 3C it’s important to note that this 3C is a product of both ocean and land temps.
As the land temp is heating up faster than the ocean, some say by a factor of 2, it is more likely that the climate on land will be more extreme than that of the ocean and very likely more extreme than the average.
In addition, the differential has potential for further climactic disruption.
Icono?
the “being better off dead” ideal is not confined to only one religion.
cripes, i’ve mentioned before that dying for ones religion is nothing to do with me, but killing, definitely is.
and working to stymie damage prevention to others as a result of a “true-belief” comes into the killing category.
After reading JQ, comments, kelp in tassie gone, 18C -in Antarctica!, i need a boost to worry, interest & hope.
“… research shows that the most motivating emotions are worry, interest and hope.”
“The Role of Emotion in Global Warming Policy Support and Opposition
“Abstract
Prior research has found that affect and affective imagery strongly influence public support for global warming. This article extends this literature by exploring the separate influence of discrete emotions. Utilizing a nationally representative survey in the United States, this study found that discrete emotions were stronger predictors of global warming policy support than cultural worldviews, negative affect, image associations, or sociodemographic variables. In particular, worry, interest, and hope were strongly associated with increased policy support. The results contribute to experiential theories of risk information processing and suggest that discrete emotions play a significant role in public support for climate change policy. Implications for climate change communication are also discussed.”
Keywords: Emotion, global warming, policy preferences
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4298023/
“Doomsday scenarios are as harmful as climate change denial
By Michael Mann + others
“It is important to be up front about the risks of unmitigated climate change, and it is critical to keep in mind the potential for unpleasant surprises and worst-case scenarios, the so-called fat tail of risk. It is, moreover, appropriate to criticize those who understate the risks. But there is also a danger in overstatement that presents the problem as unsolvable and future outcomes as inevitable.”…
https://www.washingtonpost [ replace with dot]com/opinions/doomsday-scenarios-are-as-harmful-as-climate-change-denial/2017/07/12/880ed002-6714-11e7-a1d7-9a32c91c6f40_story.html
@James I agree that 2 per cent is too high, but all I need is a defensible upper bound for cost of stabilization, and a defensible lower bound (more than 2 per cent) for cost of inaction, It’s in the second part that the choice of NNI rather than GDP plays an important role, since it includes costs of destruction.
I don’t think Scott Morrison will bring a lump of coal into parliament again. He knows that there has been a shift in sentiment against past climate policies both within the electorate and in his own party. Tony Abbott’s mob is no longer influential. The difficulty seems to be the National Party with Barnaby saying that country electorates – even though hit by drought, bushfires, and water problems – are not “interested” in climate change and fiercely resisting any change in policy. It is worth thinking hard about this and asking whether he is just wrong – farmers more than others are aware of climate and climate trends.
In the main, Barnaby is trying to support coal producers who export most of their output. But as far as I know, no one outside the Greens has ever proposed banning coal exports – certainly, this was not part of the Garnaut Review or any of the policies of either major political party. The focus must then be on new coal producers such as Adani as well as the Carnavan policy of building new coal-fired policies everywhere.
A way forward that would have achieved carbon pricing years ago would be to ditch concerns about projects like Adani but making it clear that no subsidies or infrastructure support will be given to such projects. The coal-fired power stations being built in Japan, China and India will sustain coal demands for decades and the coal will be purchased somewhere. This “ditching” is an entirely non-radical proposal since I cannot think of any serious proposals on the table to ban coal exports. (Except on this blog, of course!)
Then provide the energy sector with the carbon price it needs to make economically consistent energy plans that will involve renewables and maybe even nuclear. The market can make rational choices. Obviously to prevent loss of competitiveness among the small parts of the Australian industry (concrete, alumina) that would experience unfair loss of comparative advantage all imported carbon-non-taxed imports would be subject to border taxes and all exports of such carbon-containing goods by Australian firms made carbon tax-exempt.
If this sort of proposal had been seriously entertained when various economists (including myself) had put it forward a decade ago we would now have sensible energy policies and an economically sound transition away from carbon-based fuels. Firms that are chafing at the bit to get involved in the new technologies would have their chance to do so and energy policy would not become bogged done in unnecessary arguments about destroying Australian manufacturing and our second-largest export industry, namely coal.
https://www.theage.com.au/politics/federal/be-amazed-by-canberra-s-masters-of-delusion-20200207-p53yvq.html
If one says, as Harry Clarke essentially does, that;
(A) “Realistically, Australia cannot stop coal exports.”; and
(B) “Realistically, Japan, China and India will continue to burn coal for decades;
then, one is saying;
(C) Realistically, catastrophic climate change will happen to a near 100% certainty.
Sadly, I think Harry Clarke is right. I am just not sure if Harry Clarke knows Harry Clarke is right.
@-Harry Clarke
“The market can make rational choices.”
Maybe it can, but it rarely does.
Most often it appears to make choices based on short tern expediency and entrenched interests.
So subsidising coal (or any fossil fuel) extraction is chosen for local advantage and financial gain by established businesses in the short term against global harm and financial loss in the long term.
YMMV on whether that is rational.
“The market can make rational choices” is simply a statement of faith, like the Apostles’ Creed, and in equally vague language at that.
What is a “market”? What is “THE market”? What is “rational”? In what context(s) is a choice rational or irrational? What is a “choice”? Is a “choice” always a choice or is it sometimes something else, like an imperative?
Crucially, we need to remember the dispute between rationalism and empiricism. “The market” may sometimes make “rational” choices but are these empirical choices? Market economics is a prescriptive discipline not a descriptive discipline. That is to say it prescribes the structures of markets (plural) according to laws, regulations and customs. It prescribes the numéraire (the money unit). It prescribes the rules of property ownership and how the numéraire may and may not be applied to real objects and processes to “value” them. It prescribes, in the larger complex of law and custom, the level of force which can be applied under law to enforce property rights “measured” in the numéraire and ultimately enforceable by the (functional) state’s monopoly on coercion and violence.
The valuing process itself, occurring in “the market” and measured as it is in quantities of the numéraire, equates disparate objects and processes via a dimensionless quantity. The dollar is a dimensionless quantity. In physics, and the hard sciences in general, dimensionless quantities are usually “ratios of quantities that are not dimensionless, but whose dimensions cancel out in the mathematical operation.” [1] However, in science, the ratio is empirically constant and therefore dependable and properly equatable (able to be properly and usefully used in equations with results that can be empirically descriptive and predictive). In economics, the ratio(s) is (are) not empirically consistent but rather are constanrly changing at numerous differential rates for numerous different comparisons.
Dollars do not describe or measure the value of real objects and processes. They assign (prescribe) the social power to acquire, control, manipulate and dispose of real objects (and processes) and their externalities (consequences). How the dollars are assigned to owners of dollars is the next question. There is no support in any kind of objective, descriptive economics for the idea that dollars are assigned according to “productivity”, whatever that is.
Note 1 : Source, Wikipedia.
Traditionally resource imbalances were settled by war, it seemed the only rational choice.
It’s better for the market to make the rational choice, it’s obviously beyond politics.
Bloomberg is calling time out for Australian coal, “..the best thing that can be done for the coal-export industry and all those who depend on it is to prepare for its end. Because that is, one way or another, looking inevitable”
https://www.bloomberg.com/opinion/articles/2019-02-25/australia-coal-exports-don-t-have-much-of-a-future
John Quiggin says at 3:52 pm
…”but all I need is a defensible upper bound for cost of stabilization, and a defensible lower bound (more than 2 per cent) for cost of inaction”…
And when you publish, Scomo won’t be able to say “when someone can tell me what it will cost “…
Quick – do we need to line up peer reviewers now? Funding a phd?
Iconoclast, A and B do not imply C. If they did I would not be participating in this discussion and nor should you. We should have a party in preparation for the inevitable, forthcoming doom.
Of course, countries will face incentives to decarbonize. Partly because, with this proposal, their untaxed carbon-containing exports will be taxed by us and we will collect the loot, not them. Partly too through emulation effects. The highest per capita emitter on earth does not price carbon.
Markets don’t work perfectly but you do need a price signal on carbon emissions to get the right sorts of signals in the electricity sector. This sector have not been active climate deniers – they are saying give us reliable, long-term price signals that will underwrite our investments. These low carbon investments will barely cause an economic hiccup but you do need the signals.
What I emphasize to you is that almost no-one has suggested ending coal exports. Garnaut talked about targeting the fugitive emissions associated with mining and, of course, the coal-generated electricity sector production but definitely not coal exports. The only twist in this proposal is to exempt from taxes those Australian exports that draw on this electricity. This ends the furor over “unfair loss of competitiveness”.
If akarog is right then good and well. But I don’t believe he is – not over the next decade or so.
There’s a limit to how many countries can say “our fossil exports will account for 30% of the remaining carbon budget”. Since Canada, Australia, Saudi Arabia and Russia have all done that… Harry might be right regardless of what he says.
Harry Clarke,
I am trying to understand your position. Some parts I agree with. Some parts I disagree with. Finally, in total, I don’t think the parts of your proposal add up to an integrated and consistent whole. Let me start with the part(s) I agree with (even though I find the detail of implementation and compliance fraught with difficulties).
I agree with carbon taxes. I believe the best way to put a price on CO2 emissions is by taxes and perhaps by tariffs. Tax CO2 emissions domestically and perhaps put a tariff on CO2 emissions generated in making products abroad which we then import. This much I agree with though how we calculate or impute CO2 emissions to imported products and services and how we determine whether or not the exporting nation has collected carbon taxes and thus imposed a genuine carbon price, I do not know. It would be possible for nations to game such a system in many ways. For example, collect carbon taxes up front and give other subsidies to the industry with other pretexts. For example, we could charge carbon taxes for fuel used in mining operations but give miners other tax breaks. Then there is the issue of all the subsidies for fossil fuel use, which around the world are massive
Moz in Oz makes a good point. Every nation wants to use, export and gain wealth all its fossil reserves which might in each case account for say “25%” of the remaining permissible emissions budget. Only trouble is, there are far more than four countries like this. Add them all up, plus all the dribs and drabs and you probably get to something like 400% of permissible emissions.
It seems to me that each big player in fossil fuel emissions wants to free-ride and wants someone else to limit emissions. It seems to me your proposal is a free-rider proposal for Australia. We want to free-ride by exporting coal and absolving ourselves of the consequent CO2 emissions in another country. In one of Christopher Marlow’s plays, IIRC, a man accused of infidelity says “That was in another country, and besides the wench is dead.” Likewise we want to pretend that emissions (pun maybe intended) in another country are not ours when they originally came from us.
The only logical process would be to add emissions taxes somewhat like value added taxes. People do NOT dig up coal to NOThave it burnt somewhere eventually. Thus the emission tax should be added at recovery even before it is burned. Miners should (pre-)pay the full tax on the stuff (coal, oil, gas) as soon as they pull it out of the ground. Then they recoup the tax when the next person in the line buys the coal and pays the added tax component too. Of course, miners and drillers use some of their own fuels and fuels from others for their operations. They must pay tax on this too in this scheme and they cannot recoup that tax from others.
Tax at recovery source. Desperate times require robust measures. It’s the only way to get serious about stopping fossil fuel burning. Every other method is simply nations trying to free-ride in one manner or another by not costing the climate damage they are responsible for and have a hand in. We can’t pimp out coal and pretend it’s not partly our fault that other nations are polluting the planet with it.
If, what you say is true. “They will just get the coal elsewhere”, then it really is hopeless. As for we “should have a party” that’s precisely what we are all doing right now. We over-consuming and overindulging (the definition of a party in many ways) all the time and always at the expense of climate, environment and other poorer people.
Somehow I missed Shaun Micallef’s MAD AS finding a believer in the economy a few years ago.
“.. But I don’t believe he is – not over the next decade or so.”
It seems that an end is in sight and with that you would think that coal is now a risky and depreciating investment.
My two cents worth…
We are in the current pickle because the costs associated with carbon emissions haven’t been priced in. If they had been, we wouldn’t be emitting greenhouse gases like there is no tomorrow. Since the market has clearly failed, we need active engagement by the politicians.
Trouble is, we are in the current pickle because although the majority of Australians want political action on Anthropogenic Global Warming, our politicians don’t put a price on that, i.e. they ignore us, or they diminish the scale of the threat so they can justify doing a threadbare minimum. Protests are either ignored, or treated as an opportunity to exercise new powers of arrest and detention.
Since both major parties fail to take the necessary and increasingly urgent action, all we can do is vote for the Greens. Enough of us do that, it would get the attention of the major parties.
One of the really good threads that someone like myself comes to Quiggin for, for better information.
But what hope pertinent information reaching the public anyway, when this goes on? :
https://independentaustralia.net/life/life-display/assange-collaery-snowden-smethurst-criminalising-truth,13573
akarog says: February 8, 2020 at 10:40 am
030https://johnquiggin.com/2020/02/06/the-worst-case-is-happening/#comment-21984195213867029
..As the land temp is heating up faster than the ocean, some say by a factor of 2, it is more likely that the climate on land will be more extreme than that of the ocean and very likely more extreme than the average.”
Well, there is an awful lot going wrong in the oceans due to climate destruction caused by global heating related temperature rises. Coral reefs around the world are sickening and dying in large numbers now from high temperatures. Then there are related devastating factors not found on land, eg., oceanic acidification, and sediment outflows following increasing flood events on land.
Regarding temperature rising and acidification, coral reefs are critical to loads of sea life at some stage of development not just those that live permanently on the reefs. Elsewhere biomass may be in serious decline, such as that of the hugely important high latitude “cold” water krill stocks.
As to whether or not temperature rising is faster on land – refer to KT2 above “kelp in tassie gone” – on the tele last night was the news that virtually the entire marine ecosystem off the southern Tasmanian coast has been wiped out in just the past few years due to increasing temperature. The rate of temperature increase derived from two studies was given as lying between 2 and 4 times faster than elsewhere in the world! A local long term diver said he had witnessed events where the temperature rose rapidly by 6°C (iirc) from around 13°C when a warm water eddy from the current offshore had whipped into the coast. He said three weeks later all the kelp had gone. He emphasised “all”! Sea urchins are finding there way there now and their numbers are exploding. They’ve begun a new export industry: sea urchin guts to Asia!
It won’t be long before they could be exporting from a coral trout fishery way south of Tasmania except those beauties require a rather complicated coral reef habitat in addition to moderately warm water, and there’ll be no stocks of coral trout to draw from if their current tropical habitat is hit by more coral bleaching due to extreme marine heat waves there…