What market failure? What is the correct price for a tonne of CO2e? Lets see the numbers. I suspect what you think is the correct price is whatever will cause people to burn less coal.

The market failure is the planet heating up. The external cost associated with greenhouse gas pollution is experienced through impacts of global warming. Estimates of the cost of a tonne of CO2 range from less than $0/tCO2 to over $400/tCO2 (see page 287 of the Stern Review). As explained in Stern, “if the marginal cost of abatement is lower than the marginal cost of the long-lasting damage caused by climate change, it is profitable to invest in abatement.” As global warming increases, the costs increase, as does the social cost of carbon. This ‘convex behaviour’ means that the uncertainty in costs is an argument for more abatement because of the increasing risks (risk = probability * badness).

As Greenhouse Gas Levels increase above 550 ppm CO2e risks get especially bad and it will be necessary for Australia to eventually reduce emissions by greater than 60% in order to prevent this. The correct price is therefore at least as much as required to cause people to burn less coal.

One of the earliest likely effects of climate change on Australia is severe damage to the Barrier Reef, which is likely to occur at temperature increases of less than 2 degrees C. The Barrier Reef is worth about $5.8 billion per year, so if Australia invests this much or less per year in climate change abatement, it is likely to be a good investment provided it is well spent. Other costs that you should count are increased climate variability and drought (the 02/03 droughts and 06/07 droughts both cost something like $6 billion).

The marginal costs of different forms abatement generally increase with respect to abatement (as we start with “low hanging fruit” like reducing land clearing, not using incandesant lightbulbs etc). If we restrict abatement to one area (eg electricity generation) then the marginal costs increase more quickly. If we expand abatement activities to include areas such as reducing coal exports or reducing deforestation overseas then the marginal costs increase more slowly.

Sorry for the long post..

This graphic shows the nitrogen dioxide problem relative to the US and Europe.

There are some attitudes in this article I find scary. If the want per capita GDP bigger than the US and a car in every garage, then they can’t have it if it’s going to kill the planet.

Oigal, drscroogemcduck is right, IMHO, when he says:

I suspect what you think is the correct price is whatever will cause people to burn less coal.

I thought that was the idea. The hope would be that it doesn’t lead to energy deprivation, though.

That will work….. Must be why the Indonesian Government is forecasting a 40% increase in coal exports over the next 18 months…They must be counting on “feel goof (ooops good)” concepts like these.

and the net effect of the carbon tax on emissions..NIL..
but what a way to throw the guilt by being free and easy with other peoples jobs (who cares if it achieves nothing as long as we make a point..oh and doesn’t affect us personally)

There may indeed be some will but remember that 16 out of 20 of the world’s most polluted cities are already here and that hasn’t done much except lead to the authorities saying � we need to maintain economic growth so we will have the technology and finances to tackle the pollution problems.�

Polluted skies, I’ve heard that all factories around and in Beijing will be shut down for the three months before the Olympic Games next year in order to allow athletes to function in clean air. It will be interesting to see if that has any galvanising effect inside China.

IPCC have a cut-off date for what scientific papers are considered. Stern, working without that restraint, has included some material that is later than the IPCC would be looking at. That’s my impression at least.

Both have tried to standardise the way they present the data and I think there are some differences, eg in what “now” actually means.

From the IPCC we only have the Summary for Policy Makers (SPM) documents for the first two working parties. When we get the full documents I expect it will have detail comparable to, probably exceeding, the already large Stern Review. Meanwhile Stern has more detail on what I wanted to post on.

The SPM of the third working party, the one on Mitigation of Climate Change is due next week on 7 May. I wanted us to have a bit of a think about the 60% target before it hit the deck. An outline of what it will cover is here (small pdf).

There are some annoying problems about how the data is presented, and I ran into one that made my head spin last night. If my head stops spinning and it’s still a problem I’ll post on it. Don’t worry it doesn’t set existing science on it’s ear or show that we a re plunging into a new ice age.

The point is that if we export coal to countries where there is no price signal (like most of the world), or a very low price signal (a tonne of CO2e is priced at less than a Euro in the European ETS at the moment), then we are contributing to the market failure of emissions without a proper price signal.

What market failure? What is the correct price for a tonne of CO2e? Lets see the numbers. I suspect what you think is the correct price is whatever will cause people to burn less coal. Birdy is correct in accusing people of engaging in energy deprivation.

I haven’t read that Productivity Commission report in detail, but there is something strange about the figures. They are way below total emissions (354 vs the official figure of 564 for 2004). I suspect they represent either stationary plus transport CO2e emissions only or perhaps ‘energy’ emissions of CO2 only. Almost certainly they leave out four other categories.

There must be a definition there somewhere, but I don’t have time to look right now.

Kim, obviously we need to wait a few days, but it will be interesting.

The average max for April (1840-1994 was 26.1, for May it is 23.2 so we should be getting about 24.6 right now.

In the USA’s case, only about 20% of electricity comes from nuclear power. In China, I don’t have the exact statistics to hand, but it’s much less - they only have 10 reactors in operation.

Where countries do rely on nuclear power for most of their electricity needs, their emissions are a lot lower.

That’s just flat wrong, Steve.

While this just lists CO2 rather than all greenhouse gases, it’s reasonably illustrative: list of countries by co2 emissions per capita.

Call it flat wrong if you like but I actually read all the reports that both you and Brian post including the eighty two page Productivity Commission Report from the 4th Apri; this year. I have also looked at the table you posted last week.

Trouble is that your table is a listing on a per capita basis whereas the Productivity Commission report just lists the Biggest polluters by amount of GHG emissions. On that basis The US and China are streets ahead of the fiel with Russia third.

Of course China is going to look good in figures on a per Capita basis, as does the US but in actual worst polluter terms they are so far in front nobody will ever match their achievements.

I would just like to point out that the tim who posted up top was not me, the tim who regularly posts here on climate and energy-related issues

Don’t worry, tim, we know timmeh when we see him…

China is a worry. It looks as though they are going to be the champion GHG emitter within months.

Correct me if I’m wrong, but the 4,732 million tonnes quoted for 2004 is just below the sustainable allowance of 5 Gt for the planet. I read somewhere in the last few days that they have flatly refused to consider GHG caps of any kind.

There was a feature in Thursday’s AFR about pollution in China which was similar to this earlier one from Spiegel.

I think the WTO may have to concern itself with this issue eventually if significant GHG emitters remain recalcitrant. The ‘polluter pays’ principle should apply.

he could also tell why the nuclear powered nations are the biggest polluters

That’s just flat wrong, Steve.

While this just lists CO2 rather than all greenhouse gases, it’s reasonably illustrative: list of countries by co2 emissions per capita.

Compare France to Germany, or Sweden to Denmark - to take pairs of similar countries. The countries that get most of their power from nuclear emit about 40% less CO2.

As well as explaining why such a high risk and high priced form is necessary in Austrralia, he could also tell why the nuclear powered nations are the biggest polluters and where we are to get the workers from as the US can not even keep up.