Category: Environment

Uranium exports: bonanza or bust?

John Quiggin173 Comments

Note: The usual sitewide ban on discussions of nuclear power is lifted, for this post only

Queensland’s ban on uranium mining was lifted last year, and a committee is due to report soon on the conditions under which mining might be restarted. As recently as a year ago, the prospects for uranium exports looked bright, despite the Fukushima disaster. In March last year, the Bureau of Resource and Energy Economics predicted “prices close to $100 a pound between now and 2015, rising to $124 in 2016 and $141.6 in 2017, in constant 2011-12 Australian dollars.”

In reality, however, the price has fallen to $US43/pound in early 2013 and looks set to decline further. Looking ahead, the future of nuclear power looks bleaker than at any time since the industry began. That’s bad news for the global climate – cheap and safe nuclear power would be the ideal replacement for coal if it could be delivered – but there is no benefit in denying reality

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Trifecta

John Quiggin101 Comments

If there were still magazine stands, I’d be all over them today. Three pieces of mine have (coincidentally) come out on in the last day or so, in fairly disparate publications

* In Aeon (a new British “digital magazine of ideas and culture, publishing an original essay every weekday”), I have a followup to my first essay there, which argued the case for a Keynesian utopia, with a drastic reduction in market working hours. In my follow-up, I look at the environmental sustainability of the idea. The tagline for the essay “For the first time in history we could end poverty while protecting the global environment. But do we have the will? ”

* Continuing on the utopian theme, Jacobin magazine has published The Light on the Hill, a reply to Seth Ackerman’s piece on market socialism

* And, at The National Interest, a piece with the self-explanatory title, Will Banks Finally Be Brought to Heel?

While I’m plugging my own work, I thought some readers might be interested in this paper on financial liberalisation and asset bubbles, written in the leadup to the global financial crisis. There’s not much I would change now, and it’s still a pretty good summary of how I think about the financial bubble that created the crisis. The linked working paper version is from 2004, and it eventually appeared in the Journal of Economic Issues, the main journal of the institutionalists who carry on the tradition started by Veblen and Commons in early C20. Not surprisingly, given this obscure outlet, it hasn’t had a lot of attention.

India also cold on coal

John Quiggin39 Comments

Following my post on China, I took a look at the situation in India, generally seen as the source of the next big ramp-up in coal-fired electricity. I found this article by Giles Parkinson, who suggests on the contrary

poor supply and pipeline infrastructure, and the high cost of coal imports mean that coal- and gas-fired generation is becoming unviable, even in a country with huge economic growth, an energy deficit and massive energy needs.

Following some of the companies mentioned by Parkinson, I found the recent news is even worse for coal-fired power, and better for renewables and the environment

Tata Power
CLP

As an aside, there have been a lot of stories about a boom in coal-fired power in Europe, in response to low global coal prices. At least in part, though, the story seems to be that the plants in question had been allotted a fixed number of operating hours before they closed down under the EU “large combustion plant directive which forces high-polluting power plants to close by the end of 2015 or after 20,000 operating hours from January 2008 unless they fitted greenhouse gas reducing equipment. So, the combination of cheap coal and expensive gas made it profitable to use up the hours quickly, then shut down, as with these UK plants.

Peak (thermal) coal ?

John Quiggin20 Comments

Most of the news on CO2 emissions has been bad. In particular, there are plenty of stories suggesting that coal-fired electricity is booming, and that this can be expected to continue. Although the evidence is mixed, I’m coming to the opposite conclusion. It’s already clear that no new coal-fired power stations will be constructed in the US for some time to come, and that many old ones will close, thanks to cheap gas and EPA regulations. And, while there are some new stations coming on-line in the EU, closures will predominate there too, although they still need to work out what to do with Poland.

But the big news is from China. Not that long ago, the standard story was that China was turning on two new coal-fired power stations every week. Now as this AFR report (paywalled, but another version here) says, China is cutting back hard on coal expansion. I found this story from March, in which the China Electricity Council says that it expects coal consumption in 2015 to be below the 2011 level, implying that the peak is very near. India is also planning some big expansions, but if China can grow without coal, so can they.

All of this suggests that the peak in global use of thermal coal could be much closer than is generally thought. Demand for metallurgical coal, used to produce steel, seems much more robust at least as long as investment-driven growth continues apace in China and India. Looking at the other fossil fuels, we reached plateau oil at least five years ago. On the other hand, gas (less carbon-intensive than the others, but still a source of CO2) is booming. So, there’s still a lot of work to be done before we can end the growth in emissions, let alone start on the 80 per cent reductions we need.

The Murray Darling Basin: the end of an era

John Quiggin18 Comments

I first started working on the problems of the Murray-Darling river system 30 years ago, just as the great expansion of irrigated agriculture was reaching its limits. I’ve done a lot of different things since then, but kept on coming back to this issue. For a brief moment after the election of the Rudd government and the implementation of the Water for the Future plan, it seemed like Australia finally had the policy right. The government would buy back enough of the water rights it had given away in the past, and use them to restore something close enough to natural flow patterns to protect the most vulnerable natural environments. The money spent on the purchases would ease the pain of the adjustments that have been going on for decades anyway, as a result of “closer settlement” policies that encouraged the creation of farms too small to support a family properly.

All of that fell in a heap with the disastrous mismanagement of the Draft Basin Plan, which led to its rejection first by irrigators instead of the government. At this point, the process reverted to the time-honored patterns of political horse-trading and I announced a year or so ago that I was moving on. Now the Basin Plan is finally law. The best that can be said is that it is not the disaster it might have been. Billions of dollars have been allocated to infrastructure boondoggles, and the allocation of water to the environment is less than what is needed. But the 2750 GL environmental allocation is much more than seemed remotely plausible a decade or so ago, and there seems to be some effort to stop the most wasteful infrastructure project.

Meanwhile, on the academic front, I’ve had one last gift from my decades of work on this topic, with a publication in Nature Climate Change, something I’ve long aspired to. Admittedly, I’m listed last among nearly 20 authors of an article that’s only a few pages long. I wrote a fair bit in the drafting process, but only a couple of sentences ended up in the final paper. Still, that’s the way things are done in the natural sciences, so I’m not going to complain. For those who can’t get access, the shorter version is that, while Australia hasn’t done a great job with the management of our water resources, we are still doing better than anyone else.

As I’ve mentioned before, I’ll be starting a new Australian Research Council Laureate project next year, on bounded rationality and financial crises. I’ll also continue working on climate change, and may touch on the issue as it relates to the Basin. But, apart from that, I think it’s time to declare an end to my work on the Murray. I think the work I put into this problem, along with many other natural and social scientists, led to a better outcome than we might have seen otherwise. And, sometime before too long, I really will take the family on the houseboat trip I’ve been planning since the beginning.

The carbon price: three months on

John Quiggin83 Comments

The UQ Risk and Sustainable Management Group, which I lead, held a small workshop last week, looking at early experience with the carbon price. We plan to produce an edited volume from it, to be published early next year. A few items of information that were new(ish) to me;

* There’s been a lot of work going on to tighten up estimates of climate sensitivity (conventionally measured as the equilibrium response to a doubling of CO2). The news on this front has been moderately good. The worst case catastrophes are less likely and stabilization at 475 ppm would give a 90 per cent chance of holding the global temperature increase to 2C or less. This is excellent news, since, as I’ve argued previously, it will be a lot easier to get to 475 than to the internationally agreed target of 450. We’re adding about 2ppm/year, so the extra 25ppm more or less offsets the decade of delay we’ve just experienced.

* Just by selecting the right breeding stock, we might be able to reduce methane emissions (belches and farts) from ruminants by around 30 per cent

* Soil carbon storage, much beloved of Opposition climate spokesman Greg Hunt and others, is (almost) a complete furphy

0.4 percent of a wrecking ball makes …

John Quiggin165 Comments

… a ball bearing perhaps?

0.4 percentage points is the estimate of the CPI impact of the carbon price, published in the Herald Sun (hardly likely to understate it). In the attempt to stop this catastrophe, the Australian political right has trashed its intellectual credibility, embraced lurid conspiracy theories, reduced its leading publications to laughing stocks, and promulgated a string of easily falsified talking points, each one more absurd than the last. So, now that their predictions of doom have come to this, what will be their response? My guess is that they will double down – Catallaxy and Andrew Bolt are already on the job.

Of course, a price of $23/tonne is just the thin end of the wedge. Most estimates suggest that we need a price somewhere in the range $50-100/tonne to produce a long run shift to a low-carbon economy. That might amount to a price increase of 2 or 3 per cent – about the same as the GST.

Will there be buyers for Queensland’s uranium

John Quiggin134 Comments

Dumping yet another election promise, Campbell Newman has just announced the end of restrictions on uranium mining in Queensland. Crikey asked for my opinion (their article is here, maybe paywalled). I said

The end of Queensland’s ban on uranium mining comes at a time when long-term prospects for uranium markets have never looked bleaker. The failure of the “nuclear renaissance” in the US means that at most 2-4 new plants will be built there this decade, while older plants will close as plans for upgrades and license extensions are put on hold. In Europe and Japan, not only will there be little or no new construction, but the phaseout of existing plants is being accelerated. China’s big expansion plans are still on hold after Fukushima, and the program as a whole is being scaled back in favor of renewables. In these circumstances, uranium exporters must accept lower prices, be less choosy about their customers, or both. As one of the few markets with significant growth potential, India is in a strong bargaining position. It’s not surprising that the Gillard government has been keen to overlook India’s contribution to nuclear proliferation and the limited progress that has been made in separating civilian and military programs and stockplies.

Stuck in the 20th century at #Ozfail

John Quiggin56 Comments

I really need to get back to the analysis of tax and expenditure options I’ve been working on, but the absurdities of the Oz keep distracting me. Today’s paper runs a front page story claiming “Temperatures were higher 2000 years ago“. The story is based on a study published in Global and Planetary Change, which uses tree ring records to estimate (with lots of caveats about uncertainty) that Northern Hemisphere (presumably land) temperatures were warmer in the 1st Century AD than in the 20th. More precisely, “The first century AD was the warmest 100-year period (+0.60C on average relative to the 1951-1980 mean) of the common era”. Take that, warmists!

There’s are a couple of minor problems with the story. As part of the Murdoch empire, encompassing 20th Century Fox, the Oz has apparently not noticed that the 20th century ended some years ago. And, being prone to printing silliness about pauses in warming, the writer, Graham Lloyd, did not bother to check whether the temperature today is warmer than the 1951-1980 mean. This isn’t hard to do. The US National Climatic Data Center reports global temperatures on a monthly basis. It reports that the Northern Hemisphere land temperature for September 2012 was +1.04 ± 0.26 above the 20th century average (I’ve checked and 1950-80 was about equal to the average for C20 as a whole).

So, the correct headline for the story should have been “Northern Hemisphere warmer than at any time in past 2000 years”

One more point, just for completeness. Readers might reasonably assume that the graphic accompanying the story is taken from the journal article it reports. In fact, it’s credited to the Global Warming Policy Foundation – given the fact that the Oz has linked to it, you don’t need to be Einstein to guess what kind of policies the scientific ex this foundation (headed by Benny Peiser) is pushing.

Update Reader andrewt points us to the actual article. The GWPF graphic is taken from the article, with the addition of a bunch of chartjunk. The article actually focuses on Northern Scandinavia, though its results are broadly consistent with other reconstructions at the hemispheric and global scale. And, while I won’t bother linking, it’s clear that Lloyd has taken his story, and interpretation of the results, from the Anthony Watts “sceptic” site.

Statistical significance

John Quiggin27 Comments

I know I should just ignore the Oz, but faced with its continuous campaign to promote innumeracy, cheered on by the likes of Alan Jones and Andrew Bolt, I can’t help but try to set things straight. We’ve seen on many occasions that nearly all “sceptics” either misrepresent of misunderstand the concept of statistical significance, assuming it to correspond to the ordinary meaning of “significant”. The classic example is the Lindzen talking point, made in 2008 that “there has been no statistically significant warming since 1995”. As everyone who understands statistical signifance (notably including Phil Jones, who gave an accurate response and saw a distorted version of his words become a delusionist meme), that’s because statistical significance depends on sample size. Roughly speaking, to see a significant upward trend in a noisy time series, the trend, multiplied by the number of years of data, needs to be about twice the standard deviation of the random variation about trend. So, if you have an upward trend of 0.015 degrees per year, and a standard deviation of 0.1 (these are estimates, but feel free to check)) you typically need 14 or 15 years of data to see a statistically significant trend. Over shorter periods, it’s easy to eyeball a pause or decline, as this graph from Skeptical Science shows.

Lindzen obviously knew this, and it was easy to check that he could go back 13 years from 2008 (but no further) without finding a statistically significant trend. He also knew that, given a few more years of data, the trend for the period since 1995 would be statistically significant, but correctly assumed that no-one on the delusionist side would know or care. Now, the Oz has this, from Michael Asten, professor of geophysics at Monash University. It’s worded carefully enough for me to think he knows he’s pulling the same swifty as Lindzen, but it’s hard to tell for sure[1]

Global temperatures have not increased in a statistically significant sense in the past 15 years. A pause of 10 years in the upward trend of the past 40 years would be unsurprising from existing models. A pause of 20 years would definitely surprise. Changes across the next five years will be watched closely.

As you would expect, Asten has to move Lindzen’s goalposts forward by a couple of years, to an implied starting date of 1997. Note also that he slides from “no statistically significant trend” to “a pause”. What can we say about this? In one sense he is right. As I’ve said, we need about 15 years of data to get a statistically significant trend, so we wouldn’t expect to find one with 10 years, and we would usually expect to find one with 20 years. But, of course, that number itself is variable. Asten is repeating basic facts about time series, in a way that would lead unwary or gullible readers (the vast majority, given the outlet) to suppose that recent evidence casts doubt on the observed warming trend. The only thing that’s hard to figure here is whether he is fooling himself as well as his readers.

fn1. (Lindzen himself often slipped from “no statistically significant warming” to “no warming” either out of sloppiness or because he thought no one was looking.