NAIF Naivete

I was recently asked to comment on the Northern Australia Infrastructure Fund, which has largely dropped from sight since its apparent primary purpose, channelling public money to the Adani mine project, was vetoed by the Queensland government. Here’s my response

The NAIF is a failed political solution to a non-problem, harking back to the developmentalist ideology of the mid-20th century.. It reflects an outdated view of Northern Australia as a largely homogenous, underdeveloped region, in need of special government action to get growth going. In operation it has proved to be little more than a slush fund, dribbling out modest amounts of assistance to a grab-bag of projects with no coherence.

Whatever the individual merits of these projects, including regional universities and airports, fish farms and power plants they don’t differ in any important way from similar projects that don’t happen to be located north of the Tropic of Capricorn.

The NAIF should be wound up, and the funds allocated to a coherent program of infrastructure investment based on national needs rather than arbitrarily geographical distinctions.

A Green New Deal?

The idea of a “Green New Deal” seems to be everywhere, quite suddenly, although Wikipedia suggests it has been around for quite a while and that the phrase was coined by the ubiquitous Tom Friedman. There’s quite a good summary of the various versions by David Roberts at Vox (for those who don’t know him, an excellent source on climate issues in general).

The fuzziness of the term is, in a sense, unsurprising. It seems obvious that any progressive policy for the US must fit this description in broad terms. That is, it must be a modernized version of the New Deal and it must imply a shift to an environmentally sustainable economy. So, I’m going to put up my own version, without claiming that it is the One True GND.

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Adani’s Potemkin village

Throughout the long struggle over Adani’s Carmichael mine, I’ve argued that the project, as well as being environmentally disastrous, is not financially viable. Adani’s objective has been to keep the project alive, both to avoid bringing the loss of money already spent on the project and to maximize the chance that an Australian government will either pay them to go away or stop the project in a way that leaves open the possibility of a claim under the insidious system of Investor State Dispute Settlement, which still applies between Australia and India, even though our trade agreement has lapsed.

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Published (almost!)

Economics in Two Lessons is listed as the #1 New Release in Microeconomics on Amazon. I’m not sure what this means, but it sounds encouraging.

It’s now available for preorder now, with a release date of April 23, the hardcover publication date. Apple books also has it for pre-order.

Thanks again to everyone who read and commented on the excerpts I published along the way. I’ve tried to mention you all in the acknowledgements, but it’s just about inevitable that I will have missed someone.

Energy in 2019: dead horse roundup

If the world is going to avoid dangerous climate change, we need to accelerate the pace of the energy transition towards decarbonization. So, as 2019 begins, it’s worth looking at the state of play. Easing into things, I’ll take a look at the dead horses: nuclear and “clean coal”.

AFAICT, hardly any nuclear plants started construction in 2018, continuing the trend of recent years. At the beginning of the year, lots of reports suggested China would start 6-8 plants, but (again AFAICT) the actual number was zero. Elsewhere, the massively delayed Vogtle project in the US just avoided scrapping. At this point, the best hope is to limit premature closures of existing nuclear plants and keep the focus on ending coal.

“Clean coal” is a deliberately ambiguous term, encompassing carbon capture and storage, which would eliminate CO2 emissions, if only it worked, and ultrasupercritical or “High Efficiency Low Emissions (HELE) technology, a marginal improvement on existing technology.

CCS was an obvious dead horse a year ago, and nothing has changed that. Bob Burton gives a good summary.

But at least CCS would have made a difference if it had worked. The marginal improvement in efficiency going from 1990s “supercritical” technology to more modern “ultrasupercritical” isn’t worth worrying about. In any case, it’s come too late. Although there’s still a big pipeline of coal projects using older technologies (most of which will have to be cancelled if we are to achieve climate goals) there aren’t many new ones. Outside China, the number of HELE plants we are ever likely to see can be counted on fingers and toes: one in the US, a few in Europe, a few more in India, and a handful in developing countries.

The joy of forgetting

I just read (on a plane) The Labyrinth Index the latest novel in Charlie Stross’ Laundry series (a mashup of HP Lovecraft and Len Deighton). The central conceit is a spell which causes Americans to forget the existence of the President whenever they go to sleep. After reading the book and nodding off, I had a dream that someone has a similar office in Australia, with a couple of deputies, one in charge of the bush and another in charge of the money. On waking though, I couldn’t remember any of these.

Update: Apparently, I’m not alone.