Brexit: The endgame

On 29 March this year[1,2], if nothing else changes, the UK will leave the European Union under the terms of Article 50. Unsurprisingly, lots of scenarios are being scripted, but the one I see as most likely doesn’t seem to be among them.

I expect that nothing much will happen until about 28 March. May won’t get a deal that can pass through Parliament. If she allows a vote at all, it won’t be until late January and it won’t pass. At that point, or possibly before, Labor will try a motion of no-confidence which will also not pass. There will be a push for a second referendum, but that will be stymied by the fact that the current law requires a minimum of 12 weeks to hold such an exercise, and that will be too late. There may also be an attempt to get an extension of time for the Article 50 notice, but at least one of the EU27 will find a reason to block it.

May will keep stalling for time, as she has done since taking office, until the deadline approaches. At that point, the ports will start to clog up, as shippers try to move goods across the channel before the No Deal exit. There will be attempts to negotiate temporary “No Deal deals” to smooth the flow, but they won’t go anywhere. By March 28, or maybe a bit earlier, panic buying will empty supermarket shelves and stockpiles of medicine.

At that point, the prospect of NO Deal will become too terrifyingly real to contemplate and there will be only one option left. Britain unilaterally revokes its Article 50 declaration, and everyone agrees to forget the whole sorry business.

Feel free to point out plot holes, or suggest your own script.

fn1. Rather less momentously, I will turn 63.
fn2. It’s generally good to be cautious about revealing your birthdate online. But mine is on Wikipedia, so I guess there’s no harm in that.

No planet but this one

The Voyager 2 spacecraft has just passed through the heliopause and into interstellar space, forty years after it was launched.

On the one hand that’s a stunning technological achievement and a reminder of the wonderful universe we live in. On the other, it’s a reminder that humans will never go out to explore this universe, or even leave Earth in significant numbers.

Although Voyager 2 has passed the heliopause it is still within the gravitational field of the sun. It would take another 30,000 years to fly beyond the Oort cloud which marks the boundary.

These facts could have been computed when Voyager was launched though at the time its mission was limited to five years. But if they had been pointed out as an argument for the impossibility of interstellar travel, the response would surely have been that the problem would be solved by technological progress. Forty years before Voyager was launched, flying across the Atlantic ocean was a major feat. Forty years or so before that, the first heavier-than-air flight was undertaken by the Wright brothers.

Extrapolating one could reasonably expect that forty years more progress would produce massive advances in space travel including human space travel. In fact, though no one knew it at the time, the heroic age had already passed. No one has travelled to the moon since Voyager 2 was launched and, quite possibly, no one ever will. The promise of the space shuttle has been abandoned in favour of the 1950s technology of the Atlas rocket. Meanwhile physicists have closed off just about every possible loophole that might allow us to evade Einstein’s conclusion that the speed of light is an absolute limit.

The other achievement of the Voyagers and their successors has been a comprehensive exploration of the planets and moons of the solar system. They have revealed many marvels, but nowhere remotely habitable compared to, say, Antarctica or the Atacama desert.

The biggest lesson of our decades of space exploration is that Earth is the only planet we have.

A small piece of good news for the global climate

The market price of Bitcoin and other cryptocurrencies is plummeting, having dropped by 10 per cent just today, and 50 per cent over the past month. The bubble that reached maximum expansion a year ago is gradually deflating.

The good news is that a lower Bitcoin price makes the energy-wasting process of Bitcoin mining unprofitable for many, so lots of miners are turning off their servers.  Most estimates of the marginal cost of mining are around $4500 per coin, but the market price has just fallen to $3500.

That situation won’t last long. Every couple of weeks (more precisely, every 2016 blocks) Bitcoin adjusts the difficulty of the pointless algorithm used to mine coins, so as to ensure a steady flow of around one every 10 minutes. As mining effort has declined, the difficulty is reduced, which means less electricity wasted per Bitcoin.[1]

The rapidity with which Bitcoin prices are falling give some hope that the entire disastrous episode will soon be over. If the current rate of decline (50 per cent per month) is maintained, Bitcoins will be worth less than dollar coins in a year’s time, and their impact on electricity demand will be negligible. That’s equivalent to taking a small country like New Zealand off-grid.

In this context, it doesn’t matter whether Bitcoin miners are using renewable energy or coal. The opportunity cost of the electricity they use is the coal-fired electricity that would otherwise be displaced by renewables.


fn1. As shown here, mining difficulty leveled out in September and started declining in November. Since electricity consumption depends on both mining difficulty and the speed of the machines being used, which is increasing over time, the energy wasted on Bitcoin probably started declining modestly as soon as mining difficulty leveled out.

Opportunity cost and fish

This story about the four-hour abalone fishing season in WA is reminiscent of a number of similar cases discussed in my soon-to-be-published book, Economics in Two Lessons (extract over the fold). However, it turns out to be something of a special case: a recreational fishery where economising on effort isn’t really relevant, and where the activity is culturally significant, mainly for people of Asian background. In these circumstances, a short season, with open access, makes good sense.


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Bad news on the global climate

Carbon dioxide emissions rose strongly last year after several years of a near plateau. It appears that the main factor was increased use of oil, mainly as motor fuel. I’ll try to do a more detailed analysis later, but the central element of the required response is obvious. Just like coal-fired power stations, petrol-driven motor cars need to be phased out, as quickly as possible. Australia, as an oil importer with no domestic car production is in a position to pursue this target aggressively. We should, as others have done, commit to a date, say 2030, after which all new cars sold would be zero emission.