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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Catalyst followup

John Quiggin26 Comments

Fresh from denouncing statins as a Big Pharma conspiracy, MaryAnn Demasi gives a massive plug for cosmetic dermatology, which she describes, without irony, as the “anti-ageing industry”. She dumps on some over-the-counter remedies but only to promote much more expensive treatments like botox and laser “therapy”. Money quote

Now, you’ve seen how we can mask wrinkles by freezing muscle-movement or adding volume to the skin, but to achieve the ultimate skin-rejuvenation, the one thing all dermatologists agree on is to target a protein in the skin called ‘collagen’.

It’s good to know there aren’t any stick-in-the-mud dermatologists who think that leaving collagen alone is a reasonable implication of the Hippocratic injunction “first, do no harm”.

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: Catalyst edition

John Quiggin108 Comments

In a recent post, I observed that “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.” Sadly, the ABC’s Catalyst program appears to be failing that test, judging from the first episode of their report, attempting a debunking of the claims that elevated cholesterol causes heart disease, and that statins reduce the risk of disease. I looked at the evidence on this when I started taking statins around 20 years ago, and it seemed pretty convincing. In the last few years, with intensive exercise, I’ve reduced my cholesterol and stopped taking medication, so I think I can look at this fairly objectively.

As I said, before regarding someone’s opinion as having weight, you need to check whether they have any reason for claiming authority[1]. A quick visit to Google reveals the following info on the medical “scientists” quoted in the program

*”Stephen T. Sinatra is a board certified cardiologist, nutritionist, and anti-aging specialist specializing in integrative medicine. He is also a certified bioenergetic psychotherapist”

* Jonny Bowden – The Rogue Nutritionist is a weight loss coach

* Michael Eades is the biggest prat in the diet industry (alert: possibly not a neutral source).

* Ernest Curtis publishes not in medical journals but on LewRockwell.com

AFAICT, none of them has ever published scientific research in a peer-reviewed journal (still need to check this more carefully). I’m going to watch Part II now. But based on Part I, I’d say everyone involved should hand back their degrees.

Update The second episode was an improvement on the first. At least it quoted real scientists who have done actual research, and provided something like links to the real stuff (not sure if that will show up in transcript). And the general problems of research funded by drug companies are real enough. OTOH, at least one of the experts quoted against statins was described as a litigation expert, which suggests that the bad incentives aren’t all on one side. An interview with someone from the Heart Foundation was a welcome element of balance, but looked to me to have been edited in a way that gave a misleading picture of what (I imagine) was actually said.

Moreover, given the stress on drug company profits, the show might have taken a minute to point out that both simvastatin (Zocor) and atorvastatin (Lipitor) are now off-patent. There’s been some dispute over whether Australia has moved fast enough to cut the price paid for Lipitor and to encourage the prescribing of cheap generic versions, but the days of statins as a cash cow are already receding. That doesn’t preclude the possibility that its advocates are locked into positions taken previously, but it does cast some doubt on the continuing relevance of financial incentives.

fn1. As I grow tired of pointing out to people who have a misunderstood high school lessons in logic, the alternative to rejecting unqualified “experts” out of hand is not to look at the evidence they present and “make up your own mind”. It’s to undertake the years of intensive study needed to master the subject, then assess the evidence and make up your own mind.

Smokescreen (updated)

John Quiggin13 Comments

Brsbane has had its second CBD lockdown in a week with another false alarm prompted by the fear that outlaw bikies will launch a terrorist bombing campaign against the forces of law and order. We’re already on the verge of a constitutional crisis as Newman intervenes directly in court cases, claiming a mandate from the masses, and running smear campaigns against judges who defy him.

What is going on here? The actual threat to society represented by bikie gangs (a few public brawls[1] and some low-level drug dealing and protection rackets) isn’t remotely commensurate with this response.

I suspect that the answer is to be found in the fight between Newman and Tony Fitzgerald and, in particular, Newman’s suggestion that bikie crime is worse than the corruption exposed by the Fitzgerald inquiry. Of course, that corruption didn’t involve bikies, or any kind of outlaw gang – it was run from the top, by senior National Party ministers, and the corrupt police they promoted. Its exposure left the conservative parties in the wilderness for nearly 20 years.

Clearly, Newman and the LNP have forgotten none of this. Almost their first act on taking office was to nobble the Crime and Misconduct Commission that arose from the Fitzgerald report. Pretty clearly, Newman and Seeney don’t intend their government to share the fate of Bjelke-Petersen and Hinze. Equally clearly, they intend to reward themselves and their mates as liberally as possible at the public expense. For a government that’s only half way through its first term they’ve already accumulated a track record of nepotism and cronyism that would be impressive after a decade or more in office. It’s obvious that, sooner or later, something big will blow up with the CMC, criminal charges and so on. That is, of course, unless the CMC can be neutralised and the judiciary reduced the position of tame compliance we saw in the Joh era.

A politician who preaches law and order is almost certainly picking your pockets as he does so. That certainly looks to be the case in Queensland.

Update The evening after this was posted, there were calls for the Acting head of the CMC, Ken Levy, to resign because he had written an opinion piece endorsing the Newman government’s policy. It turns out that he’s a former director-general of the Department of Justice forced out by Labor because of the fiasco over the disgraceful prosecution of Pauline Hanson. That led me to the discovery that Newman’s review of the CMC was conducted by Ian Callinan, who has ethical issues of his own. Readers can judge whether Levy’s leadership is such as to inspire their confidence.End update

fn1. The most serious case was when where a fight in a shopping centre resulted in a bystander receiving gunshot wounds. But that didn’t require new laws. One participant was convicted of affray, while the other (the alleged shooter) is in jail awaiting trial.

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.

Colin Clark Memorial lecture: National Accounting and the Digital Economy – the Case of the National Broadband Network,

John Quiggin13 Comments

I’ll be presenting the Colin Clark Memorial lecture on 14 November.

Colin Clark’s greatest contribution to economics was his pioneering role in the construction of national accounts. In the industrial economy of the 20th century, the central problem in the national accounting was the need to avoid double counting, by measuring only the value added at each stage of production. This problem is closely related to that of benefit-cost analysis for public projects. In the 21st century digital economy, value is primarily derived from the flow of information rather than physical inputs and outputs. This creates new problems for national accounting, and for benefit-cost analysis. One example of these problems is the question of how to evaluate alternative proposals for the National Broadband Network.

The talk is bundled with a lunch at Customs House, which (from past experience) will be very pleasant, but fairly expensive, so this event is mostly going to appeal to people whose employers can pay. For those who aren’t in this category, or who aren’t in Brisbane, I’ll post a link to the slides after the event.

The macro foundations of micro (crossposted at Crooked Timber)

John Quiggin57 Comments

Twitter alerted me to an amusing exchange between Chris Auld, posting a list of “18 signs you’re reading bad criticism of economics and Unlearning Economics, responding with 18 Signs Economists Haven’t the Foggiest. UL suggests that Stephen Williamson manages an impressive 9 out of 18 in his review of Zombie Economics (my response here with more from Noah Smith.

Scoring myself against Chris Auld’s list, I’d say I’m in the clear. But quite a few commenters on Zombie Economics have made complaints along the lines of his point 1, that I focus too much on macroeconomics (and finance). The implication is that, even if macro is totally wrong, only a minority of economists do it, and microeconomists are in the clear.

This defense doesn’t work, at least not in general.

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