Penny Wong gave a speech at the CEDA conference the other day. In general terms she took the line that Ross Garnaut has been taking. Facing up to climate change will not be easy or cheap, but not facing up to it will be very expensive and possibly (probably?) catastrophic.
As a small example of the risk facing Australia from climate change, around 711,000 coastal addresses were at risk from future sea-level rise, Senator Wong said.
She said best estimates showed that $25 billion in assets may be at risk from sea level rise and storm surge.
Conceding that energy prices will go up she told The World Today that the Government will
develop measures to help households, particularly those on low incomes, and address the challenges faced by emissions intensive and trade exposed industries.
Coverage needed to be as broad as possible.
And the point is this, the more emissions intensive industries who aren’t making a contribution to emissions reduction through the ETS, the more work that needs to be done by those industries that are making a contribution.
In addition, the more compensation or free permits given to some firms, the harder it is for others. And the more narrow the coverage, and the more compensation or free permits the Government provides, the less capacity we have to assist families.
So none of these decisions are isolated; they are all linked. Giving relative priority to one or another inevitably involves a trade-off.
So it boils down to what is the most economically responsible design. The more we adjust the ETS to suit particular interests, the less robust and credible the carbon market will be. (Emphasis added)
So we should assume that fuel is in. She criticised Malcolm Turnbull, who wants to leave fuel out of an ETS, saying:
This debate will be littered with temptation for the Opposition. And they may chose to continue with the old short-term politics and they will score some points along the way.
Ross Garnaut supports the inclusion of fuel.
SABRA LANE: Can a scheme be effective without petrol?
ROSS GARNAUT: Yes, it could be effective, but I’m on record as saying something that I continue to think is correct, that the costs of mitigation will be lower, the broader the base. So if you exclude anything, it puts a bit more of a burden on other things.
And it’s going to be a hard adjustment task for a lot of parts of the Australian economy, so it’s better to share that right across the economy.
Wong did assert the primacy of the the economy:
I think it’s fair to say that generally and conventionally climate change has been seen as an environmental issue. So let me be absolutely clear: this Government believes climate change is an economic issue and the only way to tackle climate change is through economic reform.
In this, I think she is locking into the narrative the Government is trying to build of being the superior economic manager. I don’t think she is slipping into the Howard mode of only doing what we can afford without inconvenience to the economy.
Wong’s speech was welcomed, it seems, by environmentalists.
Bob Brown thought she was on the right track, but needed to go further in forest policy and banning the Gunn’s pulp mill.
Greg Hunt said there was nothing new in her speech as he went off to jump out of a plane to show his concern for the environment. That’s new.
Peter Garrett got away from light bulbs and stickers on television sets to launch the Centre for Climate Law and Policy at the Australian National University - said to be a world first.
Meanwhile, Martin Ferguson had also addressed CEDA backing projects to convert Australia’s vast reserves of coal and gas to transport fuels.
A man of vision, our Marn. With a bit of luck Cabinet will sort him out, as Hunt suggests.
Comments on this blog have expressed some disappointment with this Government on its climate change actions. As far as I can see, however, they are proceeding to implement the agenda they took to the election. It is important that they build the narrative of responsible economic managers or they won’t be there after the next election. So the way forward is to recognise that dealing with climate change is going to involve pain but to emphasise economic responsibility and the need for the long term view. Wong is indicating the need for government intervention in complex and complementary ways to find a critical path, while maximising the power of the market to work in favour of climate change mitigation policy.
LYNDAL CURTIS: It will be a tough debate for the Government and the closer it gets to the next election, the harder it will be to resist the pleas of those who don’t want to face higher prices or higher business costs.
But Senator Wong wants the debate cast completely in the national interest.
PENNY WONG: So the question for all of us is are we here for short-term political gain or are we here for Australia’s long-term economic future?
On transport fuels, Quiggin calculates that carbon taxes at rates of $20, $50 and $100 per ton of CO2 yield final fuel cost increases of 5, 12.5 and 25 cents/litre. It seems to me that there could be a suite of policies relating to excise offsets, carbon taxes, tariffs and subsidies. Tax gas guzzling SUVs off the suburban roads, for example, but policies devised that allow those who use vehicles for economic purposes to continue doing so while new infrastructure (public transport for example) are installed and new technologies come on stream.
There could be ways of easing us into the pain of higher petrol prices by offsetting a carbon tax with lower excise that don’t compromise the principles of carbon trading while still resulting in price changes sufficient to alter behaviour as the market drives prices higher. That sounds like heresy, but I’d contend it’s not. It’s an option in a broader suite of policies.
In another option the poor could be assisted not by concessions and transfers that relate directly to car use but income support generally. We need some lateral thinking and brain-storming.
There was a fascinating investigative report on the excellent Background Briefing program on Radio National on Sunday (transcript up soon and repeated on Tuesday at 7pm.) There is methane in coal seams all over the place. On the Darling Downs they are poking holes in rich farming lands all over the place. Fortunes are being made on the stock exchange and the world energy giants are bidding for local companies. Official gas reserves only reflect the minor portion of potential resources that are actually proven up.
Surely some of this gas as LNG or CNG can be reserved for national use in transport and power generation as an interim technology at prices that don’t cripple us but still encourage the conversion to entirely renewable sources in a timely fashion.
Update. Before I wrote the post I couldn’t find any of the Minister’s speeches by googling. Since the I’ve found that the trick is to go to the ALP site, click on “News” then click on “Latest news” next to the minister you want. From there it’s easier for some than for others to find their latest speeches. Here are some relevant ones.
Rudd gave a speech to the National Business Leaders Forum on Sustainable Development on 19 May. I outlined some of what he said on Mark’s thread.
Penny Wong’s speech to CEDA is here. To be more specific about Australian coastlines, she said:
There are around 711,000 addresses at risk – that is,
buildings within three kilometres of the coast and less than six metres above sea level.
Peter Garrett’s most recent relevant speech posted was mostly about the Bureau of Meteorology, but had some interesting factoids, like Melbourne is going to have up to 84 more hot days above 35C by 2050, and 32 fewer frost days.
Martin Ferguson’s speech of 5 June is definitely worth a read.
Penny may have got a good reception from the environmentalists but not, according to this [which paul Norton linked to recently], from the emissions polluters.
[link]
” May 30, 2008
TENSIONS are emerging between major greenhouse emitters and Climate Minister Penny Wong after a number of hostile meetings before the release of the Government’s green paper on emissions trading in July.”
Which is hardly surprising looking at this statement of intent from the ALP/Penny:
“… the Rudd Government’s election promise of a renewable energy target was “not negotiable”…”
I suspect there will be attacks on the ALP/Rudd/Wong greenhouse policies in the near future. If not already.
So the way forward is to recognise that dealing with climate change is going to involve pain but to emphasise economic responsibility and the need for the long term view.
Very true, and I’m glad to see Wong laying the groundwork for some strong policy here instead of preparing us for concessions to polluting industries. I don’t really want a quickie populist plan, I want to see creative long-term thinking on this issue.
Nice article Brian. I like articles like this that suggest we might be able to rise above our own daily selfishness and see some long term intelligence. Please let it be true.
I suspect that the Fuelwatch push is partly motivated by the trouble big oil is threatening. Just a little reminder that governments govern for the country, not it’s corporations. The government went an awfully long way in to the debate before linking the LP and big oil, almost as if they were offering everyone a chance to back away. Of course the LP couldn’t see past the next Newspoll and big oil decided they wanted to be part of the problem and not the solution.
I think it might be the first big wedge the government has had to resort to?
CLIMET CHANGE U R DOIN IT WONG
Nice post, Brian.
Here’s my take on the politics:
[link]
What the Rudd Government continues to fail to do is talk about emissions reductions. ETS does not necessarily mean a reduction in greenhouse gas (GHG) emissions or the size of reductions needed to combat climate change. There is also no indication as to whether the Rudd Government will include mandatory GHG emissions reduction targets as part of their overall climate/environment policy. And what has been said publicly by the new Government about GHG emissions reduction targets don’t meet those required to ensure global temperatures don’t rise more than 2 degrees (C). Yet there does seem to be strong contradictions within the ALP about climate and environment policies, especially with the party’s commitment to expanding mining operations in commodities like uranium ore.
Bob Brown was quite right to encourage Senator Wong to go further in their forestry policies.
It is unfortunate though that the ALP still seems to put the economy as the central plank of their policy platform when surely the environment underpins the very existence of our lives and economy.
Marn Ferson recently announced the new continental shelf limits as being rich new resources for Australia on the floor of the sea bed. I think we have many more such resources as methane gases in the layers of the coal seams, and oils in the beds of the oil shale layers.
Policy will be pusued only if it promotes slightly negative positive growth and four wheel drives remain the safest driving option for working families in the non-ferrous metals sector. Tautologies will be invested in every policy. Cognitive dissonance will be overlooked, as doing something about that will hurt someone who votes.
Thank you for the intelligent and straight forward discussion you all offer!
I love tapping in on my quiet Monday nights for a good read.
She said best estimates showed that $25 billion in assets may be at risk from sea level rise and storm surge.
I find this fascinating, the case for AGW is further collapsing on a daily basis, but that aside, even if AGW did exist the IPCC is forecasting a trivial 20cm sea level rise over the next century, and even the claims for increased storm intensity are being discarded by AGW proponents.
Where did Penny’s “best estimate” figures come from? What does “may be at risk” mean?
Thanks onimod, Mark and julianna.
hannah’s dad, I missed that link. Sometimes when I’m out working posts fall off the side-bar. Whatever.
In the Science Show on the weekend they were saying that the recent business leader’s forum (probably the CEDA State of the Nation Conference) was contemplating emissions cuts of 95%. From what Penny Wong says, she seems to say that the Business Council of Australia and the ACCI are on board with a comprehensive ETS scheme. I’d say that if the major polluters try to push her around they may be miscalculating.
Roger, you are very cynical, but perhaps have good cause to be.
Alex, they are very much talking about reducing emissions. This is from Garrett:
Wong mentioned it also, including the 60% by 2050 target. I’ll sure we’ll hear a lot more when interim targets are set after the Garnaut Report comes down.
Before I wrote the post I couldn’t find any of the Minister’s speeches by googling. Since the I’ve found that the trick is to go to the ALP site, click on “News” then click on “Latest news” next to the minister you want. From there it’s easier for some than for others to find their latest speeches. Here are some relevant ones.
Rudd gave a speech to the National Business Leaders Forum on Sustainable Development on 19 May. I outlined some of what he said on Mark’s thread.
Penny Wong’s speech to CEDA is here. To be more specific about Australian coastlines, she said:
Peter Garrett’s most recent relevant speech posted was mostly about the Bureau of Meteorology, but had some interesting factoids, like Melbourne is going to have up to 84 more hot days above 35C by 2050, and 32 fewer frost days.
Martin Ferguson’s speech of 5 June is definitely worth a read. I assumed he might have something to do with the Clean Coal Fund ($500 million), but was surprised toi find that his Department looks after both the Renewable Energy Fund ($500 million) and the Energy Innovation Fund focussing on solar technologies and hydrogen ($150 million).
As part of the latter he’s committed $15 Million to “second-generation biofuels” whatever they may be.
He’s definitely keen on coal to liquid and advises us:
That’s a worry, frankly and expect more of the same when he finishes the
countingcats, by sheer coincidence my concentration was interrupted just now by the squalling of an invading cat outside my den and the sound of our dog barking in alarm.
So go away, no-one is going to take any notice of you here. If you want information from Senator Wong, I suggest you ask her.
Brian,
I am sorry you take that attitude. On anything I may have to say I am at all times prepared to provide references, links and data. However, what I see, time and again, on warmist sites is assertion and supposition, and seldom if ever a willingness to talk hard evidence.
I question AGW on the basis of reported observed behaviour, and no other. And the more I learn of the science, the more questionable I regard it to be. It is my opinion that the case for AGW, rather than improving as the quality of the data sets improve, is instead worsening. And as, apart from an occasional petrol pump discount on a woollies voucher, I have never received a single payoff from an oil company, I have no special interest axe to grind.
My background is science and software engineering, and hard data and precision in both thought and presentation are core to my approach. If policy is going to be built around AGW it is my position that the data must be better than a few highly questionable and arguably falsified computer models. I am sorry if I may have come over as antagonistic, not meant, but scepticism is, after all, the correct position to take in any scientific enquiry or discussion, by definition. Although many people take umbrage when asked to justify their assertions.
As a BTW, you, personally, are one of the few people I have found willing to talk numbers.
It is my understanding that the IPCC are anticipating a ~20cm increase in sea levels over the next 100 years at an ~85% confidence level, pretty much the same increase we saw over the last 100 years. If, as you say, Ms Wong is regarding up to 6 metres as the risk height then that would imply the equivalent of the total catastrophic melting of the Greenland ice sheet or the Ross Ice Shelf, which no one outside Hollywood is predicting. I think anyone would be justified in wondering how she arrived at her numbers.
As a BTW - Second Generation biofuels is the production of fuel from biomass which currently has little value, stalks, husks, etc, the stuff left over once the food component has been removed as well as other non edible biomass. As opposed to first generation, which is made from what would otherwise be edible - not a good idea.
There’s something to be said for the government not being seen to automatically embrace Garnaut’s report as well. If there are parts they claim not to like, they increase their credibility when the go and impliment it anyway. They can be seen as having had to compromise in order to get the policy up.
countingcats, the previous Government set in process establishing a research-based adaptation centre, which I understand is based on Griffiths University. Dollars to donuts Wong got her information from there.
In any case it confirms an ABC investigative report done in March last year, where the figure was 700,000. The idea is not 6m of sea level rise, but the degree of vulnerability when you have a storm surge on top of a king tide on top of sea level rise. The sea level rise assumed at the base in that report was one metre (plus or minus half a metre) nominated by Barrie Pittock, who has better scientific credentials than you. I’ve since seen Pittock say “at least one metre”.
Pittock is almost certainly quoting a paper by Stefan Rahmstorf* who cut his teeth on relativity physics and could be held to be mathematically literate. He was leading author for the paleoclimate chapter in the latest IPCC report, so he knows what’s happened before.
Rahmstorf based his calculations on a linear projection of historical obsevations, which include loss from ice sheets, albeit as a minor factor.
You quote the IPCC as about 20cm for the next century. This is where you are either being sloppy or acting in bad faith. The range given in IPCC AR4 WG1 SPM is 18-59cm. They specifically state that they have assumed no increased loss for ice sheets, although such loss has doubled in recent decades, because ice sheet loss is currently impossible to model and probably always will be.
That IPCC document was so misunderstood that the IPCC in the SPC of the Synthesis report published in November included the note that the Greenland ice sheet is projected to continue to contribute to sea level rise after 2100, and that it’s complete disintegration would contribute about 7m. They thought that Antarctic was quite stable.
This is in the face of the paleo evidence 125kya when the sea level was 4-6m higher with a temperature of 1-2C above “present” and CO2 less than 300. Gavin Schmidt at RealClimate reckons the current estimate is that 125kya Greenland and Antarctica contributed about equally.
Rahmstorf has picked apart the differences between the TAR and the IPCC AR4 calculations in some detail at RealClimate.
The real problem with ice sheet disintegration as everyone knows is that as some points it becomes discontinuous rather than linear. Hansen has focussed on this aspect. We can’t sit around and just observe how things are going to work out when the paleo evidence indicates that with 5C of warming above present there will be no ice sheets and the sea level will be about 75m higher. 25 m inundates over a billion.
Hansen has also worked out that taking into account long term feedbacks the temperature is likely to increase by 6c from a BAU increase to 550ppm of CO2e within the century.
He’s done this in several papers by taking the long view of what happened in the last 65 million years. And I have to say that the story is coherent, it makes sense. I’d refer you to his ‘trace gases’ paper (large pdf) and his exposition for laypersons in the Iowa testimony (bigger pdf).
The important thing is what we are committing ourselves to in multi-century terms, at what point the discontinuity starts and at what point we might reach a tipping point of no return.
Hansen doesn’t know the answers, but he says the signs are bad. When you are facing uncertainties and horrendous risk your best course is to ask the opinion if those who have their heads into the problem. Hansen talks at length about the scientist’s dilemma and natural reticence under these circumstances, and warns that such reticence could do us in.
But he is very aware of what’s happened before and that we are forcing the planetary system about 30 times as hard as happened 55 mya when the result was a 6C warming.
What you have to do is assemble science to to tell a story of greater scale and coherence than what has been done by real scientists, then engage in attribution modelling to show an alternative story.
I can’t argue the science, simply present the science I’ve found. The bottom line is that this, however interesting, is thread derailment and outside our comments policy. I have the choice of letting your stuff stand, with an implication that I agree with it, or putting foreword a response.
The situation is that you are currently ‘in moderation’, so your comments won’t appear unless I decide to pass them. It’s a judgement call and it’s not our policy to turn a thread into a debate about the comments policy.
[Corrected from Stephen to Stefan. He’s echt Deutsch.]
domino, I should have given a link to Garnaut’s most recent paper.
The evidence is, I think, that he and the Government are pretty much in cahoots. He’s doing his modelling with Treasury. It’s clear that on the science he’s not going to go one out, but base his modelling on the average reduction target of advanced economies. He even says that this is about the same as the Government position.
On exceptions for polluters he is quite strong. Here’s a grab, in haste:
He’s undertaking a modelling for the world and for Australia for the next century, which he says in in advance of anything attempted so far. But he reckons the models didn’t fall over, so we with with great expectations.
The tensions between Wong and the large polluters are a very good sign indeed than Wong might get things right. Previous designs of emissions trading schemes in Australia have been undermined by handouts of billions of dollars worth of free emissions permits to “existing generators who will be disproportionately affected” like brown coal fired power stations and so on.
The most important test of whether the government gets climate change policy right will be whether it chooses a cap that leads to deep cuts in emissions by 2020.
Spot on, I think, Peter. Guy Pearse warned about the Greenhouse mafia, how determined they were and how far they had penetrated the system. He said they would be no pushover for Labor if it won government.
Petrol has to be included in emissions trading.
To address the problems of climate change and environmental degradation, developed countries have to address their over-consumption, and developing countries have to consider the impact of their growing populations.
If developed countries don’t try and “do their bit” by taking greater steps to curb consumption, they’ll just look even more like hypocrites.
All those people who floated along on the feel-good cloud of ratifying Kyoto last year now have to “walk the talk”…
Note this comment from Ross Garnaut: “It’s Kevin Rudd and Penny Wong’s job to decide what they can manage. But I can’t see any good reason for excluding transport.” Peter Martin, Saturday Forum: Garnaut’s Woes [link]
Marn Ferguson is Andrew Bolt’s new hero:
[link]
Like Alex said, Labor is not doing anything to reduce emissions.
I don’t think there has been much significant action from Labor on climate change apart from ratifying the protocol, which of course does not reduce emissions without further steps being taken.
I see the current major issues of concern being:
* No moves to protect old growth forest carbon stores (Garnaut may address this)
* No moratorium on building new coal fired power stations (at least two are planned)
* Over $1b of unqualified funding for coal research and development
* A federal means test on the solar panel rebate - which has led to a drastic cancellation on installations - and will compromise meeting the 20% MRET.
* Victorian Labor’s feed in tariff is only paid on net metering and has a 2kW array cap. Which means basically nobody will get paid the tariff. This is not legislated yet, but the press releases indicate this is what they will pass this Catch 22.
* No confirmation on the emissions trading scheme details - major emitters could yet be gifted permits - recent comments by Wong hopefully indicated this won’t happen
* No systemic consideration of sustainable transport options - ongoing federal funding for roads and nothing for public transport or cycling. In fact we are witnessing an auction to the bottom on petrol prices, as if they can stop them going up . . . nitwits!
* Labor’s 2050 60% target is based on science that is now out of date. The latest science indicates cuts in the order of 80-90% by 2050 are indicated, and at least 40% by 2020. Penny Wong has ruled out “any change to Labor’s election commitments on targets”.
* No removal of perverse fossil fuel subsidies, as summarised here
A lot will hinge on Garnaut’s report, but what really matters will be the policy responses to it.
Penny Wong is also on record as saying “Garnaut’s report is just another input for government to consider”, which does not auger well.
On the positive side, there has been some action on promoting energy efficiency, but I am not sure how effective this has been.
No upgrades to building energy efficiency standards are under consideration as far as I know. They should be set nationally at 6 stars for commercial and residential, on track for 7. Currently, standards between States are dog’s breakfast.
And Ferguson still want’s to burn the 80% of our logged/destroyed native forests that and up as woodchips as “biofuel” for electricty generation. So we lose our carbon sinks - the only real recent carbon stores we have - and turn them into greenhouse gases. Brilliant. It’s Orwellian.
Peterc, I agree that there is not the proper sense of urgency. But on the other hand they are doing very much what they promised to do.
I do agree that Ferguson is a worry. Having read Garnaut’s latest speech and Wong’s, linked to above, I think they are singing from the same song sheet. In fact the Government is probably relying too much on Garnaut and the ETS for an emissions reduction strategy. Wong did argue that 60% was a huge ask when you consider that the economy is predicted to grow by 2.4% a year to 2050. But I doubt she knows that 60% is not enough.
Peterc, I don’t have time to find the link, but there was an opinion piece in the CM this morning mainly about smart cards used in public transport (ours aren’t very smart) that mentioned that Rudd had put public transport on his agenda about a month ago.
We live in hope. Quite a bit has been done in Brisbane here in recent times with dedicated busways, T2 and T3 lanes and bikeways everywhere.
Somone tell me how the maths works out. Sure there are genuine evinironmental concerns noted above, but the justification for this plan seems rather odd.
$25 billion at risk
over 100? years
but at a cost of 1% of global gdp at year zero (and Australia is a highly interdependent, small, open economy).
Australian GDP is close to $1 trillion
Economic growth averages 3-4% p.a
Please show me why we need to tax everyone to protct the assets of probably some of the highest per capita carbon emitters in the country?
Mark H, I suggest you read Garnaut’s latest especially how he looks at costs of mitigation, adaptation and BAU. Then have a look at what he says about risk and uncertainty, especially what he says about Weitzman and fat tails. Then have a look at Weitzman himself.
Then reflect that our responsibility is not just for the next 100 years, which is a mere nanosecond of Earth-time. It’s for the time it would take to repair what we do, which could be something like 100,000 years, if the PETM event is any guide. That’s about the best example from the paleoclimate history for what we are doing now under BAU.
After that I’ll be really interested in what you have to say.
I just want someone with superior accounting skills to reconcile those figures supplied by Wong and the ABS. I’m not interested in refuting Garnaut etc. I am a bit confused how that Garnaut paper was meant to inform me at all with regards to my query. It isn’t directly relevant.
Mark H,
the $25 billion was meant as a small part of what was at risk from climate change. The whole of economy figures for damages are the most uncertain number in climate science. They would be significantly larger.
The second point is that the damages are global, while GDP numbers are national, so one would not expect national costs and benefits to reconcile, even if in theory one could account for that (there are fundamental reasons as to why formal cost benefit analysis will not work, although it is sensible to make those comparisons while also accounting for environmental and social risks). That said, Australia is a developed country that is most at risk.
The work CSIRO did for their Energy Futures Forum in 2006, the results of which were somewhat overshadowed by Stern, show that an investment of 1.6% globally by 2050 is very likely (>90%) to pay off in pure monetary terms by 2100, without accounting for added social and environmental benefits. This was with some discounting (3.5% declining to 3% over time).
1% of GDP reduced from a 3% growth rate regime would be a delay of four months. The penalties with acting and getting it wrong are much smaller than those associated with acting too slowly and too late.
Even if traded CO2 reaches a price of $40 per tonne, this trading price is well below the likely social cost of carbon damages (although some economic modellers will dispute this number, there are fundamental reasons to expect it to be quite high). So I think we will externalise carbon costs into a trading regime that are below the externalities of the long term cost of those emissions.
The key point in a trading regime whether the permissable emissions are set low enough to reduce the risk over time. This is not a question directly relevant to the internal operations of a trading scheme, but is why it is there.
Why does the consumer ultimately have to pay? Because the cost reflects something closer to the true cost of having an energy system.
Thanks, Roger.
Mark H if you are interested in the costs and benefits of our options in relation to climate change as distinct from a bit of pointless point scoring in a carefully circumscribed portion of the territory to suit your purpose, then you should be interested in Garnaut.
You might also have a look at Wong’s speech linked to earlier. The $25 billion coastal property thing was just one example of several she gave to illustrate the expected impact of climate change on our natural environment. If perchance you put a dent in that specific item it doesn’t mean that the whole argument falls apart.
I’ve got to go out to work now, so I can’t continue this chat.
The discounting rate is at times less than the official inflation statistic. It isn’t discounting much at all. What is missing from justifying intervention is three part: i) ignoring the private provision of public goods (while perhaps being insufficient to deal with the problem doesn’t render them non existent), ii) the depth of carbon based energy subsidies (take alumina smelter electricity subsidies for example) iii) a realistic discounting rate and iv) justification of a discounting rate that makes sense over 100 years. Stern’s modelling of income elasticity over 100 years simply doesn’t cut it. “How price sensitive are real wages over 100 years?” , err, very. Stern’s modelling was always going to bias the discount rate down towards zero.
I hope Garnaut uses a better rate and theory than that. I suggest the real tax adjusted average corporate cost of capital - it reflects the real costs firms face as they shift their production technologies over.
“1% of GDP reduced from a 3% growth rate regime would be a delay of four months.”
Show me the maths of a 1% GDP loss over 100 years. Keep in mind much world GDP is generated in first world countries and Australia is highly integrated with the rest of the world. A GDP loss will also affect growth rates over time. It simply cannot be subtracted away and put away as a “negative saving”.
“Even if traded CO2 reaches a price of $40 per tonne, this trading price is well below the likely social cost of carbon damages (although some economic modellers will dispute this number, there are fundamental reasons to expect it to be quite high).”
There doesn’t need to be that much pain. On petrol, we already pay a specific excise of 41.92 cpl. That prices carbon (on petrol) over $100 per tonne. All we should do at worst is set the tax flat on all sources, compensate with income tax cuts and remove subsidies to carbon users.
I am deeply concerned about the use of industry policy. It rarely increases welfare, so why would it enhance welfare with respect to externalities?
There might be justification for a carbon tax. Emissions trading is unworkable as in Europe, there was too much of an incentive to cheat.
Industry policy has no justification whatsoever.
Following on from posts by Alex Schlotzer # 6 and Peterc # 20
Here’s a quote from Alan Wood’s article in The Australian this morning: [link]
Australia and other developed countries have to lead by example and reduce consumption of fossil fuels etc and encourage new technologies. However, in reality, the impact of Australia (population 21 million) cutting its emissions isn’t going to do a lot to reduce global warming.
If “developing” countries which started off their developmental phase with an enormous population base don’t try to keep the lid on emissions too, it’s pointless.
Another quote from Alan Wood today: [link]
And
According to the US Census Bureau, China’s current population is 1,330 million. It is tipped to grow by another 123 million to 1,453 million in 2025. India’s current population is 1,148 million and is estimated to grow by 301 million to 1,449 million by 2025 (i.e. just 17 years away).
Ross Garnaut’s paper Emissions in the Platinum Age: The implications of rapid development for climate change mitigation, makes the point that:
Nicholas Stern makes a similar point in his latest report, Key Elements of a Global Deal on Climate Change when he states: [link]
How are countries like China and India going to be able to keep their emissions low when they are starting off such an enormous population base which continues to increase in the hundreds of millions?
There’s no comparison between developed countries which developed over a period of 200 years with much lower populations.
Garnaut sums thing up in his Measuing the Immeasurable paper: [link]
It’s pretty scary to think how this is all going to pan out…
Garnaut tries to stay optimistic when he says:
But then again, maybe James Lovelock is on the money: [link]
Elizabeth, it seems to me that Stern underestimates what has to be done on target emissions reduction.
Mark H, thanks for the comment.
I keep hearing that emissions trading in Europe is going better now.
We are told that Garnaut is a very skilled economist and good at strategy. But I’m afraid I can’t get too excited about the economic arguments because I think the physical situation is more serious than economists are modelling for. So serious that their plans are going to be simply irrelevant.
It really worries me that so much development has been allowed on the outer fringes of our cities where people on low or middling incomes have been encouraged to move, and where their only access to employment is via the car. For one thing, these peoples lives could go seriously pear shaped if we do the right thing and NOT subsidise petrol. And I don’t think we should just shrug our shoulders and let them go to the wall because they are not personally responsible for the bad choices of government (led by the road and fossil fuel lobbies!) But on the other hand, it’ll be all too easy for the Marn Fersons to try and paint any attempt at squashing fossil fuel demand as an attack on these folks and on social equity. What to do?
Helen,
Petrol isn’t subsidised. It is already specifically taxed at well over $100 per tonne of carbon emitted. ($10 per tonne = 4 cpl tax).
I meant cutting fuel exise, sorry, or taking other measures to ease the pain of fossil fuel costs, not subsidies. I hope you understood what I am saying though.
Yes, Helen, unfortunately it’s possible to take the excise right off fuel before adding a carbon tax and still claim ideological purity.
On Mark H’s point I believe that tax on fuel in Europe is equivalent to about $400 per ton of carbon and their roads are still choked.
Eh, Brian, I’m not sure you got the point of my comment # 29…
Maybe it was a bit obtuse, but it was something along the lines of here we are, a nation of 21 million people getting worked up about our carbon emissions and how we’re going to curb them, and there’s developing countries China and India, current combined population of 2,783 million (with subsidised fuel), with forecast combined population growth of 424 million in the next 17 years, and what’s that going to mean emissions wise, sustainability wise etc?
Never mind…
Elizabeth, your point is the same one John Howard kept making; that Australia’s emissions don’t matter because they are dwarfed by India’s and China’s. This, however, is a morally bankrupt position.
Australia, as a developed carbon intensive nation, has a moral obligation to demonstrate how we can cut our profligate emissions (highest per capita in the world) so that developing nations can follow. This means, among other things, more sustainable transport options than routinely burning thousands of tonnes of oil, and leaving coal in the ground while we transition to renewable energy sources.
The crime on petrol excise is that the huge amount of funds generated go into consolidated revenue and pork barelling for elections, than to R&D for sustainable transport options?
Who is surprised that petrol now costs $1.65 per litre? It will be $2 by year end, and most likely $3 by the end of 09. Demand up, supply down.b And all our bozo politicians can do is argue about “taking 5c off per litre” and “its price inelastic”. Rudd even thinks we can “improve supply”. This is very short term thinking.
I am riding my bike more. It’s exercise elastic.
Peterc
Here’s a quote from my earlier comment # 18:
Yes, I understand we have a “moral obligation to demonstrate how we can cut our profligate emissions (highest per capita in the world) so that developing nations can follow.” (Although I’d still like to know how the emissions (including those from land use change and deforestation) of ALL countries are objectively assessed).
But I’m still wondering, how are countries like China and India (both currently in an intensive developmental phase), going to be able to keep their emissions low when they are starting off from such an enormous population base which continues to increase in the hundreds of millions? We’d all better get working and collaborating on those new technologies pronto! (And that means developed and developing countries cooperating together rather than continuing with the “blame game”).
As mentioned earlier, there’s no comparison between developed countries which developed over a period of 200 years with much lower populations. Also refer to Garnaut’s quote, mentioned earlier, re the huge increase in human output and consumption from the “Measuring the Immeasurable” paper: (Here’s the correct link this time: [link] )
I know I’m not an expert on Kyoto, but it seems our “global” warming agreement, with its dichotomy between developed and developing countries, was so focused on per capita emissions from fossil fuels in developed countries, that it seems to have overlooked the impact of continuing population growth, particularly in developing countries (not to mention other important environmental problems, like deforestation).
While the population of the developed world is expected to remain virtually unchanged over the next 40 years, around 1.2 billion, the UN report World Population Prospects suggests that, if recent fertility rates remain constant, the population of the developing world could grow to 10.6 billion by 2050. (Can we increase funding for family planning do you think? And yes, I know about Harradine/Howard.) This would mean a global population of nearly 12 billion by 2050, heading towards doubling our current population of 6.6 billion.
I guess something’s going to blow before then, but I wonder what global emissions and the environment will be like in 2050? I’m sure Australia will be doing its bit (keep up the cycling Peter), but will that be enough to save the world as we know it? I don’t think so…
Anyway a la James Lovelock, I’m off to enjoy the next 20 years…
Tooodles
Elizabeth, I don’t think I failed to understand you, but I may have responded in a way that made you think that I didn’t. If you want a dramatic graph on population, try this one. Anyone can see that we are in a population explosion that in nature usually leads to a population crash. Maybe we’re clever enough to avoid it, but maybe not.
Then there’s this one which highlights the developing world versus the developed world.
There’s another graph which I’d have to do a screen shot and edit (then I don’t know how to upload into a comment like tigtog and Kim) which shows that 70% of the increase in emissions is coming from the developing world. This wasn’t the case back in the time when Kyoto was being put together, but it’s urgent now that the developing world gets on board in some way. Peterc is right that we need to show leadership and India for one is expecting this of us before they are going to get serious.
A possible way around this is to decide on a target ppm level for CO2e, develop a world budget or emissions (x gigatonnes of CO2e) then divide that by projected population in relation to a future target date to give you an equitable GHG budget for each nation. Then you all aim for that in what’s called “contraction and convergence”.
This gets you into 90-95% cuts for developed countries for a stabilisation target of 450ppm.
I think Garnaut in his draft report earlier this year showed that he was going to consider this equitable carbon budgetting and contraction and convergence strategy as a way of bringing the developing countries on board. If he outlines that strategy convincingly, then it’s progress.
In his most recent paper in the section on discount rates he says he is going to model pessimistic outcomes as well as the median outcome, which he says will be scary.
Weitzman says that scary is really scary and the odds of really scary are too great to ignore. He says that if you admit what he calls the ‘Dismal Theorem’, ie that the future of civilisation and perhaps the species is in play, then discounting goes out the window. Fixing the environment becomes absolutely front of mind and easily takes priority over some dream of continued economic growth.
Just before that section on discounting in Garnaut, he makes reference to the preferred target adopted by Stern of 550ppm, which is implicit in the target of 60% by 2050. He also mentions the more stringent 450ppm which has currrency to stay below the famed 2C safety rail, but I don’t think there are policies to make that a realistic outcome, with an acceptable degree of risk.
But while everyone was arguing in Bali last December James Hansen was giving a briefing at the meeting of the American Geophysical Union saying that we need to get CO2e ppm down to 350 in the first instance and see where we go from there. It was reported here for example.
At the same time the Climate Code Red report was being worked on and came out in February 2008. It took account of Hansen’s work and recommended a target of 320ppm. I think that may have been included in their earlier “The Big Melt” but I’d have to check.
Hansen is now saying that 425ppm (plus or minus 75) will commit us to an ice-sheet free world. The implication of what Caldeira is saying is that we should get right back to 280ppm, which has been my ethical position from the outset.
Garnaut has given no clue yet that he has taken account of Hansen, Caldeira and co. The problem with Hansen is that people are reluctant to go with him, even mainstream climate scientists, but when they look back to what he said 10 years earlier they have to admit that on the important stuff he was on the money.
Actually Lovelock is a bit the same, except he has less science behind him and he is given to making eye-catching extreme statements, like residual breeding pairs in the Antarctic.
Peterc # 36
Peter, re your comment: “Elizabeth, your point is the same one John Howard kept making…”
I’m not sure that Nicholas Stern and John Howard are best mates, but it looks like Stern is coming round to Howard’s point of view.
In Stern’s latest climate change report, Key Elements of a Global Deal on Climate Change (30 April 2008) he states: [link]
Good to see population gets a mention in the new Stern report. This issue seems to be a taboo subject, but it has to be acknowledged, particularly if there’s the risk that developing countries might actually account for up to 10.6 billion if fertility rates don’t decrease.
Stern also addresses the problematic developed/developing country dichotomy when he recognises:
Stern makes the point that:
It would be helpful if more was done to encourage and foster a more cooperative and collaborative relationship between all countries, “developed” and “developing”, to achieve a fair and effective new climate change agreement. After all, we’ve only got one world and we all have to look after it.
Brian, thanks for your response # 38. I have to go out and haven’t time to read it now, but will do so later.
I must acknowledge a mistake in my earlier comment # 35. When looking back to population figures in my comment # 29, I carelessly added together China’s current population to its projected 2025 population instead of India’s current population. Sorry about that, I’m hopeless with figures. Hope I’ve got it right this time…
So, China (1,330 million) and India’s (1,148 million) current combined population is 2,478 million (corrected). China’s forecast population increase to 2025 is 123 million and India’s forecast population increase to 2025 is 301 million, making a forecast combined population increase of 424 million in the next 17 years, taking their combined forecast population to a total of 2,902 million in 2025.
Also, while we hear a lot about China’s “one child policy”, it is interesting to note that, according to the US Census Bureau, China’s current fertility rate is 1.8 births per woman, and it is estimating this will stay constant through to 2025 (interesting?). And, for information, the Bureau states that India’s current rate of fertility is 2.8 births per woman and it estimates this will decrease to 2.2 by 2025 (population will still increase of course).
For info, here’s a link to the US Census Bureau International Data Base – Country Summaries: [link]
Brian, a rather belated response to your post # 38.
You say that “anyone can see that we are in a population explosion…” as the graphs you provided illustrate.
But why isn’t this crucial issue high on the climate change agenda?
For example, Tony Blair has just launched a new report Breaking the Climate Deadlock – A global deal for our low-carbon future which he has submitted to the G8 Hokkaido Toyako Summit.
While I am delighted this report contains promising news for preserving the world’s forests, it’s disappointing that it ignores the issue of population growth. While the report acknowledges the world’s population is projected to grow to 9 billion by 2050, it fails to analyse the implications of this growth for the environment or suggest building on family planning programs to reduce population growth.
I’m fascinated why population growth is such a taboo subject and why it was ignored in climate change negotiations. I’ve gathered up a stack of population books to read whenever I can get round to it…
An excellent paper by resources and environmental lawyer, Brett Simpson - Participation of Developing Countries in a Climate Change Convention Protocol (Asia Pacific Journal of Environmental Law, Vol. 7, Issue 1, 2002 – link not available) gave me some background. (This paper is a very useful overview of the United Nations Framework Convention on Climate Change which was established at the United Nations Conference on Environment and Development (UNCED) back in 1992, and subsequent climate change agreement negotiations, particularly the evolution of the developed / developing country split.)
I was particularly interested to read that during negotiations:
So that’s how “the underlying population increase driver of environmental destruction worldwide” was left out of the climate change agreement….
Rather incongruously buried away in footnote no. 134, Simpson notes:
Brian, you referred to Contraction and Convergence in your post # 38. Simpson notes that:
As you say, Ross Garnaut also refers to Contraction and Convergence and population implications in his draft report
The Global Commons Institute website notes:
I’m concerned that “Annex One Countries” (i.e. developed countries) are treated as stable from 2000 onward, and that Non-Annex One Countries (i.e. developing countries) are treated as stable from the “Convergence” year forward (in this case 2045).
According to the UN report World Population Prospects over the next 40 years the “population of the more developed regions is expected to remain largely unchanged at 1.2 billion and would have declined were it not for the projected net migration from developing to developed countries, which is expected to average 2.3 million persons a year after 2010.” (p. 5)
The UN report suggests that future population growth is going to be driven by “the less developed regions, whose population is projected to rise from 5.4 billion in 2007 to 7.9 billion in 2050.” (p. 5)
Significantly, the report also notes:
So by the “Convergence” year of 2045, if fertility rates don’t decline, it is possible developing countries could be heading towards doubling their current population to 10.6 billion, while the developed world’s population is predicted to remain fairly stable at 1.2 billion.
Am I interpreting this incorrectly or is there a problem here, particularly if there is a possibility that the population of the developing world could grow to 10.6 billion?
The UN Report World Population Policies 2007 notes that:
Can we get the topic of population growth / family planning on the climate change agenda?
In fact, can we also get a number of other important environmental issues on the agenda? The Kyoto Protocol has been seen as THE environmental agreement, “the only game in town”. But its focus on global warming/climate change and emissions from fossil fuels is too narrow.
Most significantly, the constant arguments about the validity or otherwise of global warming and emission targets has stalled action on obvious environmental problems such as over-population, forest and biodiversity destruction, water and food shortages and other environmental and sustainability issues.
We need a more broad-ranging and effective global agreement on environmental and sustainability issues.
PS: Tony Blair’s report doesn’t appear to mention Contraction and Convergence. Have we moved on? Refer to Chapter 2 – Developing the Framework for a Global Deal, Point 4 - Developing World Contributions. (pp. 42-43), e.g.
Brian, further to my last post, here are some links to articles about population growth for information:
Environmental campaigner speaks out on population: [link]
Overpopulation drives energy and food costs: [link]
The Malthus blues: [link]
What condoms have to do with climate change: [link]
Family planning to reduce emissions: [link]
Population, development and poverty reduction: [link]
The shadow that looms over our planet: [link]
The green issue that dare not speak its name: [link]
(Note: I think the article in the Economist, “The Malthus Blues”, has an overly optimistic conclusion)
Also, on the topic of emissions, here’s a link to an article, The road from Kyoto, written by Gwyn Prins and published in The Guardian in April. [link]
It discusses a paper published in Nature recently (“Dangerous Assumptions”, NATURE, Vol 452, 3 April 2008).
Here are a few quotes:
and
Elizabeth, it’s going to take me some time to fully consider what you’ve written. Nevertheless you quote Garnaut as saying:
That’s pretty difficult to get around, because of it’s inherent logic and the politics of the situation. That is unless as suggested in this article from the Thaindian News. They quote climate scientist Stephen Schneider as saying:
I don’t have any idea whether this