Watching Insiders today, I heard lots on the latest Garnaut report. Sadly, there seems little evidence that anybody (notably including Brendan Nelson) has bothered to read it in detail. Nobody seems to have grasped, for instance, that Garnaut is arguing for a fundamentally different type of target allocation – per-capita targets, rather than absolute targets that suit countries with declining populations like most of Europe.
But there’s another point that doesn’t seem to have permeated into Insiders‘ non-random sample of the commentariat (with the exception of Brian Toohey). If you look at the press release, it seems that a 10% cut in absolute emissions by 2020 (a 30% cut per head of population) as part of a global agreement, will cost us less than a 5% cut (25% per capita) without one. What’s going on?
To understand this, you have to understand the nature of the targets Garnaut is proposing. The Australian government would issue permits in quantities that declined gradually to the target level. But that doesn’t necessarily mean that emissions will physically emanate from Australia in those quantities. Why? Because of international trading in permits.
It’s not yet clear (to me at least) exactly how such international trading would work – whether private firms would trade directly on the global permit market, or it would be handled on a government-to-government basis. In the end, it doesn’t really matter; the net result of a global agreement would be that permits would be worth essentially the same around the world, and would be readily bought and sold as advantageous. If it turns out that emissions reductions in Australia are easy and cheap, we’d end up making greater physical reductions than 10% by 2020 here, and sell the surplus permits on the international market. If it turned out to be easier and cheaper to make cuts elsewhere – for instance, not logging Indonesian forests, or building hydro-powered aluminium smelters in Tajikistan, or improving appliance efficiency standards in the United States – we’d buy additional permits from those sources.
In a situation without a global agreement, opportunities for international trade will be much more limited. Of particular concern is an inability to trade with developing countries, because a lot of the opportunities for cheap mitigation are physically located there. That’s why the modelling indicates that the costs would be higher, and achieve less mitigation, for Australia in the absence of a global agreement.
Amongst the other consequences for such a global permit market is the possibility that Australia will do very little, and simply buy extra permits as required on the global permit market. But will you feel comfortable paying other people to clean up their mess, rather than cleaning up our own, even if that’s the economically rational thing to do?
THe writing on the wall they are ignoring is in with the Mayo by election result.
Even the middle classes have children and those kids will also have to live in the brave new world created out of the stubborness, greed and arrogance of people like Cheney, Howard, Nelson and Bishop.
The thing that strikes me most about insiders is they are a bunch of old fogies. I’m more interested in what our kids think, not our parents.
As a Greens member, I an naturally disappointed by Garnaut’s relatively unambitious target. Nonetheless, he consistently comes across as an honest broker, and far more in touch with the realities of the climate emergency that any of our politicians will admit to.
So I am backing Garnaut to get the Federal government on board with his 10%, and that gives us the opportunity to up the ante as the crisis deepens.
Now what will it take to make folks sit up in little old Oz? No ski season, even with snow machines?
I wonder if the atmosphere understands the difference? I’m sure that if you explained to the atmosphere that we plan to reduce our “emissions intensity” (but not our actual emissions), it would see sense, and cool a few degrees.
You mean I can keep my 20kW A/C unit, my twin 4WDs, and my 10 flights a year, if I pay some Indonesians a few bucks to not cut down their forest? Am I comfortable about that? Hell yeah!
The Mayo result was interesting. What I can’t understand is why Mayo voters didn’t vote Green ahead of the ALP at the last election. Have you seen what passes for a government in NSW?
Carbonsink: let me expand on that a little. Garnaut agrees that the absolute amount of greenhouse gas that ends up in the atmosphere is the important issue.
The question is, given that you only want a particular limit to end up in the atmosphere, how do you decide who gets to do it? You allocate a quota to each nation – if they want to emit more, they have to buy some quota of somebody who wants to emit less. The question then arises as to how you allocate the initial quotas. The model Garnaut proposes takes into account population shifts.
As to your example, if our jet-setting 4WD-driver buys a surplus of permits – and the forest does remain untouched, a huge concern – the net result is a win for the environment. Isn’t it?
Nice post Robert [as was your other recent one on the most recent draft report].
As you may know, I’ve always blogged in favour of a per-capita approach. It’s not only the most technically logical – but also the most morally and ethically defend-able.
Simply put, I think Garnaut is promoting the obvious; that this is a complicated, global problem whose causes and solution are completely interdependent. To answer your final question – I would be happy for Australia to join in the cleanup [anywhere] as opposed to contributing more and more each year to the mess – which is our sad reality.
Garnaut addresses limited aspect of the problem [as he has been asked to do]. He discusses the targets, related benefits/consequences as well as the impacts of the international agreements you mention. However, there seems to be a mysterious black box in his models called ‘low emissions technologies’. ‘Low emissions technologies’ must have some assumed cost and reliability. But I can’t find the details nor the justification for the assumptions beyond 90% capture CCS by 2020. That assumption alone is technically ambitious to say the least.
If the approach boils down to pricing emissions and leaving deployment details to the generators, how will interim to long term energy quality and reliability be assured? High cost receives considerable attention, but quality and reliability can also drive energy intensive industries off-shore.
I believe the expectation is that very limited emissions cuts will take place here at home and most of Australia’s reductions will come through the purchase of overseas reductions. But we’ve also got our own increasing demand to manage – as well as some potentially energy intensive mitigation works [e.g. desalination]. Any emissions cuts must take place in this context. Other than the insert on the 90% and zero leakage CCS scenarios [neither currently available], I have yet to see a detailed discussion [by Garnaut or anyone else] of the technologies or techno-programmatic approaches [efficiency and conservation] to move Australia to those targets according to an increasingly unforgiving timeline.
Well yes, but it also delays conservation efforts, and development of alternatives, in developed nations. We can only save so many tropical forests in 3rd world nations. Eventually, we have to make some changes to our carbon-profligate lifestyles in the west.
If the west was forced to develop clean energy alternatives now, I think the whole world would get to the 60-90% reductions we need, faster
I don’t think I understand the per-capita thing: is Garnaut suggesting that his model will be taken on around the world? I’m trying to read his original reports, but a lot of it goes over my head, and I’d never trust the media to explain it thoroughly.
Julie: in general terms, to have an agreement we need two things:
Garnaut has looked at two options for the global target – 550ppm and 450ppm. These have been very widely discussed. Frankly, both are too high, but even 450ppm is unlikely to be agreed upon in the near future.
Whatever target is eventually adopted, the level of global greenhouse emissions permitted comes as a direct consequence. While it’s theoretically possible that you could do it in another way, the only scheme workable in the time available is to allocate allowances to each country, whose responsibility is to meet them as they see fit. However, once those targets are allocated, countries can reach deals to trade allocations with each other. As long as the trade is properly accounted for, that’s OK.
But how do you set the per-country allocations?
The model Garnaut has proposed for this – contraction and convergence – has been discussed for some time. It’s not at all new, and it seems to be by far the most likely model for a global agreement. Essentially, each country would start with a allocation based on their current emissions and their population; over time, their per-person allocation would shrink at different rates such that at some point (Garnaut picks 2050) they would all be the same.
The big question mark over this is that date, 2050. There’s no particular reason to use 2050, and putting the convergence point 40-odd years into the future is particularly advantageous to Australia. Developing countries may well argue the convergence point should be a fair bit closer to the present.
Ed: a serious point, but first a flippant response…ever heard the elephant joke? The bit about economists is quite applicable here.
Apparently, Garnaut is going to spend some time in his final report talking about low emissions technologies. But there’s much more to say on low emissions technologies that hasn’t been said yet…
Leave a reply?
Okay.
When are you guys going to remember that Homo Sapiens happens to be a CARBON based life form.
In another life I fought hard to reduce the carbon cost as did many of my family over the generations.
That is the only way out for humankind to reduce the burden we cause other, perhaps more worthy, lifeforms.
Looking at it dispassionately – is anyone offering themselves for seppuku or to be a little ‘Carbon Sink’ in some foreign field?
Or will wiser heads in the future recognise the whole show as big a line of bullshit as ‘Tupips from Amsterdam’ or the ‘Great South Sea Bubble’ that almost, but not quite, sealed the fate of the British Empire before it ever got started.
Yesssss. It’s all about flogging, then squandering, other people’s money; usually without their leave or knowledge.
Are there any concerned money men out there who might squeak the truth?
Django, that comment might have benefited from another draft or two, because I’m sure I don’t know what you’re on about.
I think Django’s trying to say that we’re all being swindled for money.
Dear Nick Caldwell,
Django simply relates some historical precedents – economic ‘bubbles’ that burst
1 – The Dutch Tulip (tupip must have been a typo) futures scandal where tulip bulbs futures certificates became a second currency.
2 – ‘The Great South Sea Bubble’ – invest in the age of discovery and take a share in the possibility of exploiting new and exotic lands – where as it turned out was nothing much but water.
A by-blow was KorvettenKapitan Cook coming later to OZ – but by then the bubble had burst and much money was fritted away.
Clearly Django relates that to what he sees as an emerging ‘Carbon Bubble’ that once much money has been ‘invested’ and diverted – will cause galloping inflation and then – ‘pop’again.
It is clear he means that very few people have thought the trading of carbon through and related the topic to past incidents.
Further he speaks of certain ideas the elitists quietly put about about drastically reducing the population burden on the planet. He suggests that wars managed that in past generations and his – “‘Carbon Sink’ in some foreign field?” – paraphrases the death of a British soldier on overseas service – “some small part of a foreign field shall forever be England” – or something like that.
“Seppuku” – ritual suicide.
Might just be, Nick, that Django knows his history and expects others to use their imagination, read some history, or go ‘Google’ if they cannot understand.
Gruss Gott -
Knopke
Thanks Robert. I hadn’t heard about the contraction-and-convergence before (or rather, I’d sort of heard something similar without that name), so I got the idea that Garnaut had come up with it all by himself. Good to know I can get proper explanations here!
I agree that 450ppm and 2050 are not really going to help much. Is Garnaut right in assuming we can increase our commitments later? I’d think that it’d be better to go hard at first, get the large changes (and screams from big polluters) out of the way and then fiddle with the small details later. Then again, I’m the kind of person who rips off band-aids instead of peeling them off slowly
Garnaut’s pessimism relates more to the possibility of getting drastic action from rapidly developing countries (China and India particularly), than the developed world. The developed world can’t get to 450ppm without some serious changes in trajectory from the developing world.
His hope is that when the world realizes a) how serious the downside of climate change is, and b) that mitigation isn’t nearly as hard as it’s been made out, that the world will be prepared to do a lot more of it.
Thank you Klaus, for explaining what you had previously said under a different name. Note: referring to oneself in the third person is creepy, and having multiple selves is not the answer.
I’m not sure anyone really needed to have what you said explained. Your vicelike grasp of two or three historical incidents is not in question – the coherence of these into some kind of message relevant to the topic of the thread is.
If what you want to say is “kill yourselves to reduce population and that will solve global warming”, then come right out and say it. Tulip bubbles and Rupert Brooke are of, at best, tangential relevance.
Trading in emission permits between/among countries sounds like an enormous vote of confidence in the market. What if a country renegs? Minor transgressions will probably be regarded as normal with a new system but will we get the equivalent of rogue states if big blow-outs occur? Or will it be a bit like IMF loan defaults?
Technically a nation can be declared bankrupt but it has no real significance as Mexico and Argentina might attest.
Convergence-contraction based on populations is also going to be tricky. Some Middle Eastern countries of Islamist bent are going to see the hand of the infidel with any population queries. What might the pope be saying in 2020? The whole concept is going to require a tectonic shift in world governance.
But then the problem demands it.
Pablo: yes, compliance worries the hell out of me too.
Things like methane from ruminant animals, soil carbon, and so on, seem ripe for figure-fudging and consequent rorting.
It would seem to me that some form of apolitical, quasi-judicial body representing every UN member but without voting/caucusing rights be formed. It would have a strong secretariat incorporating the IPCC scientific and UNESCO bodies doing the legwork. Some form of ‘clearing house’ on convergence/contraction claims and ETS bids would need to be set…shades of the AFL draft. A verification appeal process would have to be allowed for disputes…. Help me here Robert…like you I’m out on a limb and worried to hell.
Yes. But look how popular the WTO is…
Depends upon your metrics. If its something which has been done vs what would have been done then yes its a net win. But is it the best thing to do ? Is that what needs doing ?
I feel that companies will choose the least cost option, to meet the legislated requirements. “funny that” I hear you all say. Spending a smaller amount to avoid a fine and leave future obligations to the future.
On the longer term, If the paying for the forest delays R&D into stuff which we’ll eventually need, then no its not that much of a net win.
What i dont quite like about the ETS is that there is a big section of “Magic happens here”. Dont just have an ETS, put out heaps of R&D money, make sure to add zero emission generation to the grid and make sure it will work by running simulations of likely future grid makeups.
Have the NRET so that we dont just achieve least cost abatement by turning off around 60% of the power stations etc (well that’s a valid way to achieve a 60% reduction isnt it?).
Robert @ 9:
You may be interested in what higher convergence rates imply for Australia’s 2020 target. I did a submission to the Green Paper on this today and I came up with a ballpark estimate of 8-10% deeper targets for 2040 convergence compared to 2050 convergence, and 12-17% deeper targets for 2030 convergence compared to 2040 convergence. If one uses Garnaut’s per-capita targets, then Garnaut’s emission reduction targets are on the low (ie. weaker) side of the range obtained from the latest ABS population projections for Australia.