Category: Environment

Peak aluminium?

John Quiggin76 Comments

The announcement that Rio Tinto is to close its alumina refinery at Gove struck me for a number of reasons, starting with the fact that members of my family are affected by it. First up it’s worth noticing what’s mentioned (the high dollar and low aluminium price, which flows through to bauxite and alumina) and what isn’t (the carbon tax and legislation for its removal). Having claimed that he was going to save industries like alumina and aluminium smelting from the carbon tax “wrecking ball”, Abbott is now shown up, once again, as a fraud[1].

In the short run, the obvious policy implication is that the RBA needs to be firmer in pushing the dollar down. It was, I think, a mistake to hose down talk of direct intervention, as was done recently. Given our declining terms of trade, we should be closer to $US0.80 than $US0.90 now, and heading down further.

The bigger question of interest, though, is the future of aluminium. The big story of the past 10-20 years has been the massive growth of production in China, driven by cheap coal-fired power and lots of subsidies. That’s driven prices down to historically low levels (inflation-adjusted, probably record lows). Production in Australia is now clearly uneconomic, but even the Chinese are losing billions.

Declining prices have driven steady growth in demand for aluminium. Since the supply of recycled aluminium is dependent on past production, there has been a multiplied effect on demand for primary aluminium, which is the big driver of greenhouse gas production in this industry.

The general assumption (as with most trends) has been that these trends will continue indefinitely. But it’s clear that prices have to rise just to cover costs, and will rise further as China starts to price the local and carbon costs of coal-fired electricity. Moreover, in technological terms, aluminium is definitely a 20th century commodity. Its inherent properties of lightness and strength gave it great advantages, but it is now being displaced in advanced uses by carbon fibre and in some basic uses by lightweight steels.

So, it seems to me quite plausible that aluminium demand could stabilise over the next decade or two, with the result that most demand can be met by recycling rather than energy-intensive production of primary aluminium from bauxite (via alumina).

Note: I topic-banned regular commenter Hermit from talking about aluminium smelters, as it become an idee fixe. The ban is lifted for this post.

fn1. Has any new PM ever been shown up so comprehensively in such a short time? Not in my memory, which goes back to Harold Holt, and includes some shockers.

When the facts change, I change my mind – what do you do?

John Quiggin111 Comments

This quote is attributed, perhaps spuriously to Keynes. A sharper version of the same point is made here by Noah Smith, exploring the concept “Derp”, “”the constant, repetitive reiteration of strong priors”, where “strong priors” in the technical Bayesian sense, mean that ” … you really, really believe something to be true. If your start off with a very strong prior, even solid evidence to the contrary won’t change your mind. ”

A notable example of this, very relevant on this blog, and cited by Smith, is the cost of solar energy. Roughly speaking, the cost of solar modules has fallen by a factor of 10 over the past few years, and the cost of installed systems by a factor of three. If that hasn’t changed your mind about the relative merits of alternative policy option, then you must have really strong priors, and in that case, you shouldn’t be engaging in debate, since your mind can’t be changed by evidence. As Smith observes, “That is unhelpful and uninformative, since they’re just restating their priors over and over. Thus, it is annoying. Guys, we know what you think already.”

But, it’s easy to throw stones, so I thought I would check my own archives to see if I was guilty of Derping on this point. Here is what I thought in 2004

Nuclear (fission) power is probably the cheapest large-scale alternative electricity source (there are some sites where wind is cost-competitive, and similarly for geothermal) but it is still a good deal more expensive than coal or gas. How much more expensive is hard to tell because the industry is riddled with subsidies, but I’d guess that the full economic cost is about twice as high for nuclear electricity as for coal or gas. Moreover, most recent construction has been in places like China and Korea where safety standards may not be as high as they would have to be to get nuclear energy restarted in the developed world as a whole.

What this means is that nuclear power won’t enter into calculations until we have a carbon tax (or equivalent) steep enough to double the price of electricity. It’s clear though, that much smaller increases in costs would make a wide range of energy conservation measures economically viable, as well as reducing final demand for energy services. Implementing Kyoto, for example, would not require anything like a doubling of prices. Whether or not a more radical response is justified, it’s clearly not going to happen for at least a decade and probably longer.

Nevertheless, if mainstream projections of climate change turn out to be correct, and especially if, as Lovelock suggests, they turn out to be conservative, we’ll eventually face the need for new sources of electricity to replace fossil fuels. Solar photovoltaics are improving fast but still a long way from being cost-competitive. So it may well be that, at least for an interim period, expansion of nuclear fission is the best way to go.

I didn’t mention carbon, capture and storage, but I also supported that as a good option for Australia, assuming it could me made to work.

The facts have changed, and I have changed my mind. I now think the role of renewables, and particularly solar is going to be much larger than seemed likely ten years ago, nuclear much less, and CCS marginal.

Update Obviously, this post was intended to provoke a reaction from the critics of renewable energy (normally, also advocates of nuclear) who regularly comment here, challenging them to say how they had adjusted their views in the light of the evidence of the last decade. Most commenters responded thoughtfully. But our single-topic nuclear fans, Hermit and Will Boisvert, responded by herping even more flerps of derp. Despite being reminded of the topic, they just kept on pumping out the same constant, repetitive reiteration of their priors that defines derp. This does, at least provide me with some guidance. From now on, comments from single-issue pro-nuclear commenters (specifically, the two mentioned) will be deleted unless they contain a point that has not been made previously or (highly improbably) a change of view.

Pandora Post-mortem

John Quiggin107 Comments

I have a piece in the Guardian responding to the pro-nuclear film Pandora’s Promise. The core of my argument is that, in most countries, political resistance to nuclear power is no longer the primary problem – the big difficulty is with the economics. The key paras

he fact that the world has not turned to nuclear power as a solution to climate change is a matter of economics. In the absence of a substantial carbon price, nuclear energy can’t compete with coal and other fossil fuels. In the presence of a carbon price, it can’t compete with wind and solar photovoltaics. The only real hope is that, if coal-fired generation is reduced drastically enough, always-on nuclear power will be a more attractive alternative than variable sources like solar and wind power. However, much of the current demand for “baseload” power is an artifact of pricing systems designed for coal, and may disappear as prices become more cost-reflective.

To put the point more sharply, if we are convinced by the arguments of Pandora’s Promise, what would the makers of the film have us do? Stop protesting against nuclear power? Most of us did so decades ago. Abandon restrictions on uranium mining and export? The Australian government has done so already, with barely a peep of protest. The only remaining restrictions on exports to India relate to concerns about nuclear weapons proliferation, not nuclear energy, and seem likely to be dropped in any case. Give nuclear power a level playing field to compete against renewables? In the US at least, nuclear power is already treated more favourably than alternatives, leaving aside the massive subsidies already handed out in the 20th century. The same is true in many other countries that have sought, with limited success, to promote a nuclear renaissance.

Two of the leading environmentalists quoted as supporting nuclear power are Mark Lynas and George Monbiot. They have some interesting reactions to the recent announcement that EDF will build a nuclear reactor, Hinkley C, under a deal with the UK government. Monbiot sees it as a disaster, going for massively expensive Generation III technology when the alternative was to build an Integral Fast Reactor, a design with lots of theoretical advantages but one that has never been built (other breeder reactors have been expensive failures). Lynas, writing before the announcement has a more sanguine view of the cost. Lynas compares the “strike prices” offered by the UK government for various renewables, ranging from 100stg/MWh for onshore wind, to 305stg/MWh for experimental technologies like wave and tidal energy. Offshore wind (the only source without severe supply constraints in the UK context) comes in at 150 and large-scale solar at 125. These are guaranteed for 15 years from 2014. Hinkley has as strike price of 92.50, for 35 years from the estimated start date of 2023.

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The end of the coal boom

John Quiggin188 Comments

A bit over a year ago, I put up a post with the same title as this one, except that it ended with a question mark. At that point, most of the authorities I cited took the view that the decline in the world price of steaming coal was just a blip. In fact, prices have kept on falling and are now, in real terms, not much higher than they were in 2004. More importantly, there is now no expectation of a recovery any time soon. The clearest evidence of that is the abandonment or deferral of a string of proposals to create or expand coal export terminals, most recently by BHP at Abbot Point. Investors are desperately trying to get out of the most recently completed project, at Wiggins Island.

A few observations on this

* It’s common for participants in the Australian debate to claim that the rest of the world is going ahead with coal-fired power stations and fossil fuel projects at an unprecedented rate. That was the view that motivated these port expansion projects, and it’s been falsified as clearly as it can be by their abandonment.

* Much of the discussion about climate mitigation is based on the assumption that Australia can decide how much or how little of the burden we should bear. Leaving aside the risks of a free rider strategy, our status as a coal-exporter means that the biggest impacts will arise from decisions made overseas

* Finally, for some light relief here’s former Queensland Treasurer Andrew Fraser (paywalled) citing the now-abandoned Abbott Point project as evidence of the benefits of the Bligh government’s asset sales program, of which he was the biggest booster. It will be interesting to see if he now changes tack and claims that the state was lucky to get of these assets when it could (a more plausible line, but both dubious and contradictory of his previous position).

Hand it back

John Quiggin103 Comments

The Sydney Morning Herald interviewed 35 economists and found 30 of them favored carbon price (tax, ETS or some mixture) over Direct Action. It quotes Chris Caton as saying “Any economist who didn’t opt for emissions trading “should hand his degree back”, says Chris Caton.

I’d take that a step further.

Anyone with a natural science degree in any field will find plenty of examples of denialist lies on everything from basic physics to bushfires. More generally, denialists have attacked the entire scientific enterprise with absurd conspiracy theories. No-one who endorses these attacks, explicitly or tacitly, deserves to call themselves a scientist.

Similarly, anyone with a degree that includes even minimal exposure to statistics should understand that denialists were misusing the concept of statistical significance when they claimed, a few years back there had been no significant warming since 1995. Subsequent hacks have had to move the goalposts forward to 1997. And that’s just one example of the cherrypicking dishonesty rife on the denialist side of the debate. So, anyone who claims to be a sceptic and hasn’t distanced themselves from claims like these should send back their math/stat degree.

Then there are those with university degrees, but without the training in science, maths or economics to assess the key issues independently. Anyone with a university education ought to be able to recognise the limits of their own expertise, and to be able to distinguish between bogus sources of information and the products of genuine peer-reviewed research. If they prefer the kind of nonsense circulated on denialist websites to the conclusions of scientific research, they should hand in their degrees and instead obtain one of the many qualifications available, for a modest fee and no work, on internet sites like those listed here.

Abbott's Sister Souljah non-moment

John Quiggin40 Comments

As I said in my last post, Tony Abbott has set himself the tightrope-walking task of maintaining his government’s official endorsement of mainstream climate change, while keeping his denialist base happy. Having made a mess of this with his bushfire comments, he had a chance to rectify the situation when he gave an interview to denialist and conspiracy theorist Andrew Bolt. Newscorp ran in under the headline “Andrew Bolt tackles the PM on the big issues”, but Bolt was playing touch, not tackle.

The interview was a sycophantic exercise in mutual admiration, with all the tough questions you might expect from, say, Anne Summers interviewing Julia Gillard or Kevin Rudd interviewing himself. But such interviews present smart politicians with the chance to play against type, by disagreeing with the interviewer on an issue dear to the base, but politically problematic for a would-be statesman. Presented with a soft lob question about the bushfires, Abbott could have taken the chance to define his own position as the “sensible centre”, by repudiating both Bolt’s denialism and the “alarmism” of those stressing the link between bushfires and climate. Bill Clinton famously did this when he denounced radical rap artist Sister Souljah, signalling the shift to the right undertaken by the Democratic Leadership Council of which he was part.

Instead, Abbott chose to dig himself deeper, extending his denialism on bushfires and further claiming that the observation of record high temperatures is not evidence of climate change. I mentioned in my last post that he would have a problem in formulating a response to the likelihood that 2013 will turn out to be the warmest year in the Australian observational record. He’s chosen his answer now, one that is unlikely to carry much credibility except with those already committed to denialism.

His summary of climate science, previously reported as “crap” has been replaced by “hogwash”, perhaps in deference to the sensitivities of Greg Hunt, who took strong exception to being confronted with the previous term by a BBC interviewer. I won’t link to Bolt, but the relevant passages are quoted over the fold.

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Falling off the tightrope

John Quiggin56 Comments

Having gained office on the basis of three-word slogans, the Abbott government has the problem that it now needs to answer questions in complete sentences. As a result, Abbott has immediately faced some tricky tests, and failed most of them. “Stop the Boats”, for example, ran into the problem that it assumed the Indonesians could be strong-armed into doing our government’s bidding. Unsurprisingly, that proved false, though the inevitable backdown was managed reasonably smoothly.

The trickiest balancing act, though, is on climate change. The government needs to balance its base, the vocal elements of which are almost uniformly denialist[1], with the risks of adverse consequences to Australia if we repudiate our commitments on the issue, and the risks to its own credibility of being openly anti-science.

After only seven weeks in office, both PM Tony Abbott and Environment Minister Greg Hunt, have fallen off the tightrope, rejecting the clearly established (and intuitively obvious) IPCC findings on bushfire risk in Australia [AR4 (2007) , WGII , Chapter 11, Executive Summary]

“The climate of the 21st century is virtually certain to be warmer, with changes in extreme events. Heatwaves and fires are virtually certain to increase in intensity and frequency (high confidence).”

These findings were reinforced in an interview with the head of the UN’s climate change negotiations, Christiana Figueres (listen to the audio,as the report may mislead)

Abbott’s response was to accuse Figueres of “talking through her hat”, while Hunt went to Wikipedia to discover that “bushfires in Australia are frequently occurring events during the hotter months of the year”.

This was really an unforced error by both Abbott and Hunt. They could have ducked the issue by resorting to the standard formula that climate predictions are about frequencies, not about individual events. Abbott could even have cited Figueres who was careful to say that “the World Meteorological Organisation has not yet established a direct link between the these fires and climate change.” (emphasis very clear in audio). Hunt scrambled back to the script at the end of his interview, but after the Wikipedia reference, it was far too late.

Given Abbott’s earlier “total crap” statement[2], it’s going to be hard for him to walk back a second time. He now faces two problems. On the one hand, now that he’s outed himself as one of them, the denialist base will be encouraged to demand the scrapping of his Direct Action policy. On the other hand, locking the LNP into denialism is a recipe for long-term disaster, especially with Malcolm Turnbull waiting in the wings.

It’s highly likely that 2013 will turn out to be the hottest calendar year on record for Australia. The frequent occurrence of record highs like this is a predictable consequence of climate change. Abbott had better get his spin doctors working on a form of words to handle the inevitable questions.

fn1. I’ve decided to abandon “delusionist”, my own coinage, in favor of the more standard term “denialist”. I’ll write more on this later.
fn2. In fairness, this statement was presented as a view his audience might hold, rather than as Abbott’s own. But since he’s held every possible view on this topic, and some that seem impossible, fairness can only go so far.

Free riders

John Quiggin47 Comments

It’s widely assumed that small rich countries, like Australia, can choose to do nothing about climate change, without suffering any adverse consequences. Like a dozen or so other countries, we contribute about 2 per cent of total emissions. So, whether we reduce emissions or not won’t (at least directly) have a big impact on the climate change we experience, just as an individual decision to engage in (or refrain from) littering, won’t have much impact on the amount of litter they see.

But this analysis assumes that countries that do make a serious effort won’t impose any sanctions on those that don’t. Until recently, this was a reasonable assumption since the most prominent laggards were China and the US, both of which can do pretty much as they please in international matters. But China and the US are taking their commitments seriously now, and are taking some big steps to reduce emissions. That changes the calculation for a would-be free rider.

The Harper government in Canada is already discovering this. Harper is a (barely concealed) climate denialist, who has attacked climate science, and promoted the work of ‘sceptics’. Having repudiated Canada’s commitments under the Kyoto Protocol on the grounds that it interfered with Canada’s aspirations to be an ‘energy superpower’ Harper imagined he would have no trouble securing agreement for the Keystone Pipeline, which is supposed to carry oil from the hugely destructive Alberta Tar Sands projects to markets in the US.

Canada is in the inner core of US allies, historically distinguished by its devotion to being a global ‘good citizen’. Unsurprisingly, the Canadians had plenty of favors to call in at the US State Department, which duly reported that the project was environmentally benign and should be approved.

But then everything went wrong for Harper.

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“We got it wrong”, says Oz, but they’re still wrong

John Quiggin42 Comments

Along with many others, I pointed out the absurdity of Graham Lloyd’s piece in the Oz, headlined “We got it wrong, says IPCC”. The Oz has printed a “correction”
https://twitter.com/MeddlesomPriest/status/381258223413510145/photo/1/large

blaming their absurd error on “the production process”. In the sense that the processes of the Oz, from the hiring of general editor Chris Mitchell and environment “reporter” Graham Lloyd, combined with uncritical reproduction of claims by discredited sources like David Rose “produced” the error. I guess this is true. But, this is part of a consistent pattern. Errors like this have been produced routinely in the past, and will continue to be produced in the future. Regular, but inadequate, retractions are part of this process.

A new two-step

John Quiggin125 Comments

I’ve always been envious of John Holbo’s discovery of the two-step of terrific triviality, a manoeuvre we’d all seen, but never properly identified. I’d like to solicit names for a manoeuvre I run into all the time in debates over climate policy which goes along the following lines

A: The planet is doomed unless we abandon industrial civilization/adopt my WWII-scale emergency program

B (me): On the contrary,we could cut emissions by 50 per cent quickly and with minimal effects on living standards.[^1]

A: What about cars, methane from ag production, air travel etc?

B: (me) We could cut vehicle emissions in half just by switching to the most fuel-efficient cars now on the market, methane by eating chicken instead of beef, air travel by videoconferencing and taking one long holiday in place of two short ones. The same for most other sources of emissions.[^2]

A: That’s absurd. No one would ever stand for that.

So, does anyone have a name for this manoeuvre, or, alternatively, a defense of this kind of argumentation

[^1]: Actually, we need a 90 per cent reduction by 2050. That would be a bit harder, but once you accept the idea that we could greatly reduce emissions without harming living standards, we’re down to arguing about parameter values in economic models. All economic models yield the conclusion that we could decarbonize the economy over 40 years while still improving living standards greatly.
[^2]: I’ll leave aside the question of whether it’s better to bring this about using prices (eg a carbon tax) or direct controls. My preferred answer is a bit of both, but either will work for the purposes of this example.