As Bernard Keane points out at Crikey, the key feature of the Coalition’s proposed modifications to the CPRS can be seen in one page of the modelling report put out by Frontier Economics, on page 20.
In a nutshell, domestic emissions are cut less, and more foreign permits are bought. Like a lot of things, it’s cheaper to manufacture emissions reductions in Asia than it is here.
Along the way, agriculture gets a permanent free kick – no payments for emissions, while they have free rein to sell as many offsets as they can conjure up. The report also scoffs at the power of price signals in the electricity markets – something you might expect from – I dunno, “left of center” types at LP, but hardly the kind of thing you’d expect coming from the party for whom the power of free markets to deliver optimal outcomes is an article of faith.
Elsewhere: Ben Eltham at New Matilda is similarly unimpressed.
More: Andrew Bartlett notes some of the politics. Joshua Gans is enthusiastic about more international trade in permits – with the big rider “as the international agreement is a real one with country-specific permits that can be audited properly”.
Still More: Peter Wood’s analysis, noting particularly the treatment of electricity generation. Money quote: “So if I was to own a brown coal fired power station, I would have less incentive to close it down or generate less electricity, but I would still have an incentive to find ways to make it burn brown coal with less emissions. This will reduce the amount of opportunities to reduce emissions, and increase the cost of reducing emissions.”
Like a lot of people, company directors and project developers in China, India, Indonesia, Vietnam etc. etc. have been good at doctoring the books (backdating board meetings, fiddling with emissions data etc.) to get across the line to secure CDM funding.
This is why the US assumes a certain number of permits are dodgy.
Bunch of idiots milling around and staring at the sun.
And that’s a provision Australia should adopt in its own legislation.
I’d personally rather we dealt with our own backyard before indulging in such speculation
Memo to Libs – the Efficient Market Hypothesis is dead
I’m not at all opposed to a certain level of international trading of pollution permits. There’s a lot of economic naivety amongst the hair-shirt brigade who think this is somehow a bad thing. Fixing this problem the cheapest way possible is surely all we want?
However, there are so many practical risks of buying overseas permits that it’s really dangerous to go beyond what was already presaged in the CPRS. The obvious risks include dodgy accounting, the price of permits going sky high (particularly if US companies are seeking them), and a failure to restructure our own economy, basically avoiding reality and becoming/remaining a follower.
I agree with Keane’s interpretation of the Frontier Economics report. The main feature of their ‘intensity based’ proposal is that the electricity generation sector is treated in a similar way to EITEs are treated under the CPRS, firms are allocated a large amount of free permits based on their production, so if the amount of the good being produced is reduced, they receive less free permits. Under Frontier Economics’ proposal, electricity generators will receive a large amount of free permits provided that they continue to produce the same amount of electricity.
So if I was to own a brown coal fired power station, I would have less incentive to close it down or generate less electricity, but I would still have an incentive to find ways to make it burn brown coal with less emissions. This will reduce the amount of opportunities to reduce emissions, and increase the cost of reducing emissions. This would increase the carbon price, but Frontier Economics’ modelling assumes that Australia would be part of a global carbon market, and so assumes that the carbon price is completely exogenous. This is why Australia imports more permits from overseas. In practice this would mean that we buy more CDM credits, whose additionality properties are questionable.
Another problem with this approach is that if all countries shielded the electricity generation sector in the same way, there will be less opportunities for emissions reductions, and the global carbon price will be much higher. Also, by shielding the electricity generation sector, the impact on electricity prices is reduced, dramatically reducing the incentive to reduce electricity usage. The approach in the CPRS to provide payments to households that would offset the effect on prices of the CPRS is much more sensible.
One more problem with the Frontier Economics report is that it describes its approach to the electricity generation sector as being similar to that proposed in the Waxman-Markey bill. This is nonsense. Waxman-Markey allocates a large amount of free permits to electricity retailers, who must pass on these benefits to customers, but not in the form of cheaper electricity — payment to customers would not depend on how much electricity they use. The approach of Waxman-Markey is closer to the CPRS, both do not reduce the incentive to decrease electricity usage. The Frontier Economics approach completely distorts this incentive.
“agriculture gets a permanent free kick – no payments for emissions”
Isn’t agriculture completely exempt from the CPRS as well?
only in the interim, I think, scott-e
Yes, but the Coalition proposal lets them sell offsets for a profit as well.
If they can account for emissions offset, they can bloody well account for emissions produced.
Hmm. Out-source pollution, or out-source the economy? I know, let’s do neither!
Well, the right doesn’t scoff at genuine price signals, but we do make a point of scoffing at artificial ones utterly divorced from any real worth.
HA HA HA HA HA HA HA HA HA HA HA HA HA. sorry to derail, but that’s comedy gold, Craig.
*If* foreign permits are genuine, then wouldn’t you agree that buying them, when it is cheaper than cutting emissions in Australia, is a Good Thing? I agree that the other features you mention are bad.
By the way, only straw men believe that markets provide optimal outcomes — but it is reasonable to believe that intervention often produces poorer results than leaving them alone — see http://econlog.econlib.org/archives/2009/08/do_progressives.html for a discussion of this.
In theory, I’m in favour of international trade in permits. There are a couple of problems with them in practice.
One, as dk has mentioned, is that your “if” is a pretty big one in many cases.
Two, part of the “developed countries first” approach is the idea that the developed world should invent the technologies needed to decarbonize to a very large extent, which can then be shared with the developing world. If developed countries just pay developing countries to stop logging or substitute gas for coal, those technologies don’t get invented.
There is no problem with credible international permits. As far as the earth is concerned, it does not matter where emissions reductions occur. The problem with the Frontier Economics proposal is with why there will be more purchases of international permits. More international permits will be purchased because it will be harder and more expensive to reduce emissions in Australia.
I have no problem in principle with trading in emissions across juridictions, but in practice one does need to be saisfied that
a) the emissions certificates mean the same thing in the developed country as they mean here or are discounted accordingly (in the same way one can convert $AUS into some developing country currency
b) the auditing methodology is robust and the same as auditing methodology here
c) the market for permits in the developing country is utterly transparent
d) Prices for avoidance of emissions associated with protection of forests have the same carbon price as other emissions — there has been talk of “REDD” credits going at a discount.
Fran
I have written some slightly more detailed comments here. Hopefully no more of these reports will come out this week and I will be able to get some real work done.
I completely agree, Robert. On a related note, I read a horrifying article in August’s Farm Porn Monthly. A dairy farmer in Victoria somewhere is increasing his soil carbon with … wait for it … fucking brown coal!
Sweet Baby Jeebus!
The Coalition (of the gullible) is rapidly heading to a new status as the Fools Picnic Party (FPP).
If they get that one across the line I’ll be able to sell credits for seaweed growth on my undersea mountain range in Samoa. This growth will be guaranteed safe from Global Warming induced vegetation die back and fires, something that any new plantings in the equatorial band are not. Did the FPP indicate whether credits would have to be refunded in the event of forrest fires where growth had been used to secure carbon credits? And where such a change in carbon status occurred would this void credits used to offset carbon releases by Australian companies therby throwing those companies into default on their carbon balance sheets? Could this cause compulsory company closures where old credits were required to be replaced with newer unaffordably higher cost credits, or were credits were no longer available?
Have these “people” thought this through? Have these “people” thought at all?
Peter Wood 14,
The earth’s ability to absorb carbon is already oversubscribed several fold. To micro manage small parts of the earth’s surface and call that new carbon storage in order to justify the release of previoulsy sequestered carbon else where is absurd by any scientific measure. It makes as much sense as David Irving’s farmer reburying coal and calling it carbon sequestration. But then economics is not a science, it is an idea.
The only rider on what I have said above is if vegetation is burned in something similar to the highly efficient downdraft gasifyer, that was demonstrated in the grounds of parliament house a little while ago, to yield energy for stationary energy conversion (electricity) and biochar. And the biochar is auditably sequestered for credits.
@BilB, I stated that there is no problem with credible international permits. But I do not think that many permits associated with land use or avoided deforestation are likely to be credible. Emissions reductions associated with land use should be additional to industrial emissions reductions. However, it is essential that we reduce emissions associated with land use. If I was to design an ETS, a significant portion of the auction revenue would be spent on measures that sequester carbon in ecosystems.
I don’t htink carbon sequestration even entered the dairy farmer’s mind, BilB. The pulverised brown coal is just a cheap and easily available way to increase soil carbon.
The same issue of the magazine, btw, has another article claiming loudly that farmers shouldn’t be liable for any CO2 or methane their activities produce, coz it’s all natural carbon, innit. After all, a herd of beef cattle is just another carbon sink …
I don’t think I’ll be renewing my subscription, somehow.
I wonder if there will be a rush to deforest in third world countries ahead of any international agreement in order to maximise credit claims for replanting?
What is your opinion, Peter W, on what should happen where credits paid for Australian companies to other countries where the credits subsequently are deemed fraudualent or invalid? And where such judgement is made many years after the original purchase?
I’m not particularly across the detail, but generally speaking what the NFF and farmers are saying is that only Australia and NZ are contemplating incorporating agriculture into their ETS system. They say the the US is exempting farmers from paying for emissions, but is allowing them to profit from offsets.
Farmers in Australia are generally selling into thoroughly corrupt world markets where the playing field tends to be tipped against them. They are concerned about not worsening their competitive position.
Barnaby Joyce is telling the cattle industry that the CPRS is going to cost them $70 per beast per year. I’m not sure how he works that out, but from memory it is based on carbon price of $35 per tonne. If it were true there would be no beef industry in Australia, which is why it is extremely unlikely to happen.
“I wonder if there will be a rush to deforest in third world countries ahead of any international agreement in order to maximise credit claims for replanting?”
I would think this was unlikely. Land use and land use change should be calculated on a net basis, and the baseline year for comparisons set in the past to prevent the system from being gamed in this way.
“I’m not particularly across the detail, but generally speaking what the NFF and farmers are saying is that only Australia and NZ are contemplating incorporating agriculture into their ETS system. They say the the US is exempting farmers from paying for emissions, but is allowing them to profit from offsets.”
The EU ETS does not incorporate agriculture. That said, because the EU ETS does not cover all sectors, but each EU country has an aggregate target including all sectors, EU countries have to submit a national plan that sets out how they intend to reduce emissions across all sectors of the economy. Depending on the way in which countries go about this, there will be costs to the EU agricultural sector as well, albeit less transparent than from explicitly pricing the carbon.
But Brian’s broader point is correct – the agricultural sector in Australia can be thought of as an emissions intenstive traded goods sector – if farmers in Australia face an imposition that is greater than their competitors in world markets – they could potentially lose market share without any environmental benefits. Rudd and co WILL NOT DO THIS. When and if agriculture is brought into the Australian ETS it will be done in a way so that the farm sector faces comparable costs to other countries….
BilB 22,
“What is your opinion, Peter W, on what should happen where credits paid for Australian companies to other countries where the credits subsequently are deemed fraudualent or invalid? And where such judgement is made many years after the original purchase?”
What should happen? Firms should have to buy an extra permit, and maybe pay a penalty to account for issues such as it being a different year. In practice, this may not happen. There is a problem with project based mechanisms such as the CDM where the project may have happened if there were not CDM credits available. There probably won’t be any way of being able to tell whether a project is truely additional or not, and whether it has resulted in a real emission reduction or not.
The US Waxman-Markey bill deals with this issue in a reassonably sensible way. It distinguishes between project based mechanisms such as the CDM (which it calls international offsets), and buying permits from other emissions trading scheme. If a firms uses some international offsets to account for their emissions, they have to use more than one tonne of offsets to account for each tonne of emissions.
“I wonder if there will be a rush to deforest in third world countries ahead of any international agreement in order to maximise credit claims for replanting?”
If it seemed likely that some future year would be used as a baseline, then this would be a problem.
We keep hearing from various Libs that they should stick to their principles and vote the ETS down.
It’s probably unwise to try to fathom Liberal ideology, but this seems a curious position for Liberals to take. After all, isn’t an ETS a market-based system? I thought Liberals were all for the market.
At a time of comprehensive market failure – the world economy avoiding a depression only because of massive government interventions – you would think right-wingers would jump at the chance to show how the market can work its magic. They’d even get a chance to teach a little Milton Friedman to those Lefty tree huggers. But no, it seems Liberals have no faith in the market at all.
And as for outsourcing the heavy lifting to foreigners, whatever happened to the Liberal Party being the party of “personal responsibility”?
What a mess. Can we please have a carbon tax now?
Ginja@26
No such animal: was always just a slogan.
Note: Argues that because Australia is only 1.6% of emissions, we should get a free pass. Charming.
Love to see how one argues that others don’t get the same 1.6% free pass. Wait a minute … they don’t argue that because they want to preserve the right of all to dump effluent into the atmosphere.
Filth merchants of the world unite! You have nothing to lose but your responsibility.
Carbonsink: as noted many times, what do you think a carbon tax would look like once the polluter lobby’s had a go at it?
“If it seemed likely that some future year would be used as a baseline, then this would be a problem.”
The base line will effectively be in the future for most third world countries as their emissions are modest in the first place. But apart from that, vegetation levels are a national accounts problem, reforresting is a private landowner matter and the availability of credits for sale will be handled as private transactions, independent of government, naturally because this is part of the land yield from a farming point of view. So there is a very real chance that as a date looms for some form of absolute commitment there could be a rush to clear logable timber for a fresh carbon credit earning start. Let’s face it, Forrestry Tasmania would do just that if they could get away with it, if they aren’t quietly doing just that already.
The entire proposal is an attempt to do absolutely nothing while seeming to be market savvey economic managers.
Did these economics geniusses talk about the negative effects of all of that money leaving the country, to wind up in the hands of a few well placed individuals in neighbouring countries, will have on the Australia’s current account balance?
I guess there is really no point in arguing endlessly about “what if’s” and “maybes”, because we really do not know what will happen from this point.
But that is entirely the wedge that Turnbull is driving here. He is saying that this whole issue can be externalised and we do not have to do a thing. He says this knowing full well that no-one can prove absolutely otherwise until it has in fact failed, and that will be many years from now. Your arguments make his point.
The one part of the oppositions proposal that i can agree with is that it won’t hhurt to spend the next 3 months having a serious discussion of the alternatives. However, this discussion nees to go beyond what are essentially two versions of ETS. It also needs to go beyond the idea that there is no alternative to putting a price on carbon. Keep in mind that the clean electricty capacity installed here and in places such as europe have resulted from various schemes designed to put a price on clean electricity and and offering some market guarantees for clean elelectricty.
One wonders why the opposition is not caompaigning for expansion of the programs they started instead of getting sucked into the ETS con.
Brian and Labor Outsider, under the CPRS beef would be an EITE that attracts the highest rate of compensation. So 90-94.5% of permits would be free.
There is one thing that trubbles me. Voices here (and elsewhere) are opposed to assigning carbon credits to the agricultural sector. This does not make much sense to me. Any sensible scheme will do whatever it can to maximize carbon abatement, which in this context means enabling the “carbon thrifty” to earn a return on their “carbon savings”. This is a good thing, regardless of who is doing it.
I can think, off the top of my trubbled head, of several things you could use carbon for. If they could be developed and commercialized, and it meant that carbon was being taken from the atmosphere (or not pumped into the atmosphere at all), then I’d be earning carbon credits. That’d be good for me, but more to the point, it would be good for everyone else too. Why should farmers be exempt?
nfl: I can’t speak for others, but I’m not opposed to farmers earning carbon credits if they’re sequestering carbon.
My concern is simply that the Coalition proposal gives farmers the upside of emissions trading – that is, the ability to make money by selling offsets – without the downside – paying for permits for the emissions they produce.
It’s a large, and over time growing, subsidy to farmers from the rest of us.
I have heard that agriculture is currently outside the plan because there is no RELIABLE way of measuring or estimating C emissions by farms. Or the uncertainties are huge. Farmers (quite rightly) say, “why should we pay a tax or buy a permit, on the basis of rubbery figures?”
Meanwhile, forward-looking farmers are planning to reduce electricity and fuel use, or have already. In anticipation of hefty price rises, if nothing else. Plenty of “low hanging fruit” in agriculture.
Here is an interesting article I happened across while I was wondering why someone would bury coal to increase soil carbon.
http://www.time.com/time/magazine/article/0,9171,928300-1,00.html
As a landscaper and organic grower I have used Humic acid for years to improve clayi and ‘clapped out’ soils. Recently I have used a product that is based on liquified brown coal from Vic.
It improves soils two fold, first it changes soil structure of clay soils much faster and with less quantities then Gypsum. From sticky clay to friable soil in days. Second, the carbon does wonder to soil biota, such as nitrogen fixing bacteria and other beneficial microorganism, as well as acting as a buffer to hold available nutrients . When I first used Humic acid I could hardly believe my eyes how effective it is and wondered why this is not more widely known, as it has essentially same major chemical component as liquid compost.
Surely a much better use then burning the stuff.
So, Ootz, I take it that the brown coal can break down and react with other material in the soil. This I presume doesn’t happen with black coal, or does it?
I’m interested in your soil treatment because I have planted 2 Tilia Cordata s in my predominately clay soil. I was told by the experts at the botanical gardens in Christchurch to prepare the soil very much as you have described there. Is the brown coal as effective as the Humic acid? Can you do this treatment around plnts already installed?
That’s fascinating, BilB. There are a myriad ways to keep using coal to increase atmospheric CO2 without having to burn it!
Jesus! That’s what emission trading is. It’s fobbing off our responsibilities on the poor and keepin’ ‘em poor. And, guess what, the poor know this and will tell us to get stuffed. And rightly so.
Bilb,
Not sure if we are off topic here. However, considering that food production is a massive fossil fuel gobbler (fertiliser, cultivation, transport, etc.) and basically provide us with ‘industrial’ food on our plates, while only two generations ago most Families could live to a large extent healthily of their backyards. What happend?
There are various products which contain humic acid or humate derivatives, such as humate potassium, which I would assume are all coal based in production.
For your application I would recommend products which can be bought in 1l bottles of concentrate to be sprayed on with garden hose invariably called ‘Claybreaker’ or such. Just check ‘Active constituent : humic acid’. Use recommended application and if not sufficient, repeat monthly applications. Happy growing!
What I thought was interesting, DI 39, was that in 1928 coal use was fairly limited, they were having trouble selling the stuff. What that means is that the major part of the problem that we are facing now is very recent. Since the fifties. The acceleration of atmospheric CO2 accumulation is extreme.
Oops, Oops, Ootz, I forgot to say thanks for the advice! I,ve posted that in 2 places so I deserve a smack if only to wake me up.
Ootz, the big (huge) problem with using coal in this way is that we are taking sequestered carbon out of the ground and adding it to soil where it will oxidise and add to our current problem. It’s actually no different to burning the stuff, just a bit slower.
There are much better (although probably more expensive) ways to increase soil carbon.
It’s a pity you’re helping to spread the word about using coal to increase soil carbon, BilB.
While it’s not the worst idea I’ve ever heard, it’s up there.
No need to stress out DI 39.
The use of coal based products to stimulate soil productivity would in my opinion result in a net CO2 absorption on the improved land not just as in vegetative mater but in soil biota as well, which in organic (carbon rich) soils is substantial. Carbon is the matrix of live, a bit like a drug, the difference between medication and abusive dependency lies in the quantities involved and method of use.
As for BilBs 42 observation,
just received with my bill from Ergon Energy a little fact sheet, ” What uses Watt in the average Home”. You can probably trace growth trends in coal use for electricity production with the broadscale introduction of below gadgets.
Air Conditioning 42%
Refridgeration 21%
Hot Water 13%
Entertainment 10%
Swimming pool 8%
Household appl 6%
Lighting 2%
And then there is, as I metioned above, the demand of the ‘Green revolution’, Steel and Aluminium and plastic production. Pretty insidious stuff, coal.
Pretty much like the CPRS looks now, except simpler, and less susceptible to manipulation.
Ootz @ 46, unfortunately you’re wrong.
Any carbon added to soil oxidises over time. If it’s biochar or organic material from plants that have grown there, that’s not a big deal, as it’s essentially a closed cycle. You need to add more organic material to maintain (or increase) soil carbon, of course.
As soon as you start adding pulverised brown coal, it’s exactly the same as burning it, only slower. That is, you’re contributing to AGW. The one thing it isn’t, is carbon sequestration.
“while only two generations ago most Families could live to a large extent healthily of their backyards”
If this is a serious comment, I think you may have “generations” and “million years” mixed up.
“while only two generations ago most Families could live to a large extent healthily of their backyards”
and they can again
http://www.gizmag.com/roll-out-vegie-patch/12468/
with some simple help
Lol BilB,
Look don’t get me going on this “only two generation ago” thing. I feel very strongly about it and your link brought it home to me. It goes to the core of that whole ETS/AGW issue. I dont agree with Sir Les, as I am in my mid fifties, I can clearly remember having chooks in the suburbs and in summer most vegies came from the gardens and not the fridge or Woolies. Obesity was unheard of. This to me is where the crux of the whole debate lies. It is all about lifestyle.
Not that I think we need to wind back the clock and have white picket fences popping up again, no. BilBs link showed me has really changed in the last two generations, we really have become serious consumers on a unsustainable rate and scale. It is quite simple, serious polluters need serious consumers and as many as possible of them. So in order to ‘choke’ the big polluters we will have to consume less or smarter. This sounds to me like serious lifestyle adjustments. I can’t see Turnbull nor Penny Rudd to grasp that ‘Nettle’ soon.
Where as on the other hand I see alot of this “why us Aussies first” on Blogs and alot of other ‘hot air’. From all the AGW adherents very few people mention what steps they are taking on personal level. Where as for the ‘Why we first’ crowd, Guys, have a look what the Europeans are doing, the Chinese, for god sake the States. According to a newsletter email I received from Energy Matters, Walmart wants to go 100% renewable energy, China has doubled wind power capacity in the last 6 months to 12Gigawatts. Oh yes and Faith Birol, Chief Economist at the International Energy Agency IEA sounded an alarm that global oil production is likely to peak in around 10 years; far earlier than most governments had foreseen. There, it is all about lifestyle and you heard it from me first. Now back to the chookshed.
Mind you, alot of that ‘why us first’ serves the struggling media very well. The otherday our local piles of dead trees had on its weekend edition a full cover with Plimer decked out in Arctic Gear holding a snap frozen globe in his mits. So the media think this is a circus! We may end up with an national energy supply and security debacle as we did with Telstra and broadband, public transport, health system ……. Sorry got to go, there is that bunch of ripe Sugar Bananas I need to cut down.
Ootz, I watched ABC Fora not too long ago and they gave some figures that said 1 calorie of fossil fuel energy ‘was’(‘when’ exactly it didn’t specify!) needed to provide us with 2 calories of food energy: but ‘now’ 10 calories of fossil fuel energy is needed to provide us with 1 calorie of food energy. They even gave the special case of a McDonalds burger where 1 calorie of this foodstuff required 55 calories of fossil fuel energy.
I’m quite sure these were the numbers but I seem to be having trouble getting a link for it…. I kind of remember it being from a Michael Collins or something. Of course if I get a link I will post it as they were very interesting numbers. It was not more than two months ago!
I only caught the end of it but the context was how, if Obama was serious, then he was going to have to tackle ‘the food system’ because of such figures representing the very essence of, I am supposing the topic must have been, innefficient use of energy sources!
I wrote the numbers down but failed to really pin down the name etc… something like Michael Collins or Pollins, tho, I think!
DRH, yeah that is Michael Pollan on Fora
http://fora.tv/2009/05/05/Michael_Pollan_Deep_Agriculture
I preferred his readings on First Person in the ABC Book Show.
http://www.abc.net.au/rn/firstperson/stories/2009/2296645.htm
However, this is beside my point and to some extend reinforces the issue about the circus around various issues. It is not just about how we feed ourselves, it is about our lifestyle in general. Have another look at the list @46, 40% of the average household electricity consumption goes towards airconditioning. I live in the wet tropics, the buildings that are going up around me, are still designed for building cost efficiency not for occupancy efficiency, as it provides better resale value. As a consequence they are all what we call up here ‘Shit Hot Boxes’ bristling with aircon units, if you are a lucky buyer they are of the Inverter type. And so you can go down the list.
No one is really addressing the consumer side of the issue and to me it is the crux of carbon emission reduction. As I said it is really easy; major polluters will need major consumers. If you curb/choke major polluters it will effect major consumers, and that is just about all of us.
So far we have only talked about the polluter side of the equation and conveniently forgetting our complicity in the whole situation. As I said above it is all about lifestyle and I cant see any politician grabbing that ‘can of worms’ in a hurry. Or can you?
Ootz @51: Agree with a lot of what you are saying. Just want to add a further thought to the debate.
As you say, “Faith Birol, Chief Economist at the International Energy Agency IEA sounded an alarm that global oil production is likely to peak in around 10 years; far earlier than most governments had foreseen.”
However, if you look at the global oil production figures, you will see that despite massive increases in crude oil prices since 2004, world oil production has remained effectively flat. Flat, as in constant, i.e. not rising since 2004. If we are to believe in Economics 101, then higher prices should have caused increasing production, if we are not yet at peak oil.
The RBA has written an excellent summary Bulletin on this September 2008, called “Oil Prices and the Australian Economy” (found it online). I really, really recommend reading it – only 4 pages, but packed with interesting graphs. You don’t have to read the text, just look at the pictures!
It discusses such things as our domestic expenditure on oil (Graph 3), growing oil importation and the effect of imported oil on our Trade Balance (Table 1), the likely impact of China industrialising and producing more cars than the US, and a comparison of consumption rate with growth of other Asian tigers (Graph 5).
Graph 6 shows the plateaued global oil production since 2004, which you can consider against the increasing prices (Graph 1). Tell me that aint a fair dinkum signal of the arrival of peak oil ALREADY? We are dead set in deep manure when the GFC effect wears off…
JohnD @31, sorry I just read your suggestion here, having posted something similar on one of the other blogs. Could have saved time by just agreeing with your sentiment:
“The one part of the oppositions proposal that i can agree with is that it won’t hhurt to spend the next 3 months having a serious discussion of the alternatives.
However, this discussion nees to go beyond what are essentially two versions of ETS.
It also needs to go beyond the idea that there is no alternative to putting a price on carbon.
Keep in mind that the clean electricty capacity installed here and in places such as europe have resulted from various schemes designed to put a price on clean electricity and and offering some market guarantees for clean elelectricty.”
Well said. Totally agree!
DI (NR) #48,
stabilised organic carbon is ok, and lasts a heck of a lot longer than other organics. It can change the structure of the soil, then you have an oxidation-decay cycle operating on your composted materials, perating in a shorter term carbon cycle. In theory, if you use a once-off method to increase the organic content of soil and maintain it via better management, that is still a win. Of course, if it’s renewable and you haven’t used non-renewable energy to get it there, it’s all good.
Not excusing it, but it isn’t as bad as burning it. Nor does biochar/stabilised carbon necessarily break down. Some of the carbon in some soils is very old (radiocarbon dated).
Thanks, Roger. That’s settled my mind a bit, but I still think it’s irresponsible.
Common DI,
Please look at your own carbon footprint before you start pocking at other people with your moral stick. I just come down from the roof cleaning the solar hotwater and PV panels. Our household is just about CO2 neutral (passive heating & cooling) As well as water storage and septic water recycling (biolytix), grow my own vegies and chooks, eggs etc. I do not worry to dispense a little bit of brown coal to stimulate an abused ecosystem. As far as I am concerned “Bring it on!”, I am in the process of battening down the hatches. What is everyone else doing?
I come back to my previous question to all in this thread, is Malcolm Turnbull addressing the LIFESTYLE CHANGES that we as a nation in consequence have to undergo?
For that matter is any politician, if only just hinting at it. Afaiks it is still all about the economy! An economy to do what exactly, apart from stimulating it lately?
What part of the country are you in, Ootz?
Apologies, Ootz. It sounds as though you are doing more than I am. I’m still trying to work out how to get some biochar onto my own paddock that is more-or-less locally sourced, and has been burnt to do useful work (rather than just burnt).
BilB @60 – Cairns Region, why?
. Instead of the Gym I dug over the garden and grew spuds, in Lane Cove, NSW. The Neighbours kids thought it was a hoot.
BTW, had chooks on the balcony in the city before, no probs. You see, everyone prefers fresh eggs, Neighbours too
DI re biochar thing, just forget about it, common old compost is the best in regards to CO2 and soil fertility. Though it s a bit like brewing your own beer. The ingredients got to be right and basic instructions adhered to.
However, I am still asking the question relevant to the topic of this thread – Does Malcolm Turnbulls approach to Emmission Trading address/explain the Lifestyle changes our Nation will go through as a consequence? Does any politician for that matter? Or does everyone think it is business as usual?
Thnks for the RBA link Elise @55.
Over at Unleash someone was making the same point as you, that oil production has plateaued out rather then peaked. O well, with that in mind and the ongoing wobbles of GFC, throw an emission trading in the mix, pretty interesting scenario.
Absolutely agree with you here
“However, this discussion nees to go beyond what are essentially two versions of ETS.
It also needs to go beyond the idea that there is no alternative to putting a price on carbon.”
Hence, my ongoing questioning about Lifestyle, isnt that what it really is going to boil down to. Should’nt we include that as a handy reference in designing and implementing Emission Reduction Approaches, or at least discuss it?
Ootz,
re your Dorothy Dixer on lifestyle – no politician of an other than green hue will touch lifestyle. It is totally a no go area for politics. It’s easy to explain – when you’re trying to get aspiring voters or working families to vote for you for the marginal improvement in income worth a cup of coffee a week, the last thing the politician wants to tell that voter is that they can’t have stuff.
Appealing to voters to act for the benefit of others, society or the environment is a conversation of yesteryear. The only viable political strategy is cornucopia. MORE PLASMA!!
Then you read Jared Diamond’s book Collapse and related works from others and think – yep, we could wreck the place with our eyes closed. By Saturday. Without. Even. Trying.
Ootz @63, I’m glad you found that RBA link. I think it summarises a lot of useful information using a small number of words.
In response to your comment that the oil production has plateaued, it only looks like a plateau up close. The drawn-out peak is because we are continually supplementing oilfields that are declining, in a mad race against time; replacing the dying mammoths with lots of small mice.
I would like to offer another link, to a summary graph from The Oil Drum (an oil industry online site).
http://www.theoildrum.com/files/cclt20090516.png
The difference in the number of barrels/day at the peak/plateau of 2005-2008 between the RBA graph and this graph, is because the Oil Drum does not include various oil equivalents, so it gives the dominant underlying story from the oil industry. Otherwise the trends are the same.
The most important point is that this graph shows our likely unpleasant future, starting NEXT YEAR. We are standing on the cliff at the end of the mountain range. It’s all downhill from here, folks!
The data is based on “bottom-up” field-by-field reports of detailed reservoir simulations, which are used for monitoring the production from the oilfields. Even if you don’t know what all the oil industry annotations mean, the trends are clear enough, and you can calculate the percentage decline between now and say 2020.
Somehow, we are going to have to get by on less oil. MUCH less, if the Chinese and Indians all want to drive cars too. There are orders of magnitude more of them than the current OECD car-driving population. Even if only the wealthy top 10% want to join in, that is a serious additional demand on a declining supply.
One further note, is that from my experience working on declining oilfields, they invariably decline FASTER than the simulation models predict. The models are too conservative, or too optimistic if you like. Since this graph is based on conservative modelling, the real shortfall could unfortunately be worse.
We will be living in interesting times…
We dumpster dive for compost ingredients, which is fine until everyone starts doing it
Chooks in the city is pretty easy, we’re part of the Ceres Chook Group so we get the economies of scale and don’t have to deal with landlords getting uppity about livestock. 60 hens in one quarter-acre chook pen is easier to deal with than 5 in the backyard. Although chasing 5 escapees at once can make me re-think that idea.
Lifestyle changes are easy enough if done incrementally. It’s like gaining or losing weight – a little bit every day is easier and better than a binge once a month. After a while you notice that people refer to you as a bloody greenie and you wonder why.
Roger Jones, I never thought of my question as a DD. Surely once we are collectively hopping down the cliff that Elise is outlining @ 65, blood will be called for. Indeed, clever tactics would be to make sure your party is not in Government in the ensuing train wreck! Is this what all this ETS argie bargie is about, hedging?
Hey Moz, yup same here, incremental change is the word and creative use of others rubbish I call resource opportunism. Building sites are great treasure troves. I wear my ‘Eccentric’ badge with pride and decorum, I am working towards getting my place shown in Vogue Living. Though, as you said, once everyone gets on the bandwagon, kind of spoils it. How many ’share holders’ with the 60 hens? Bet you get more tangible returns then any bluechip stock atm. Ceres, are u in Vic, do you do LETs as well?
Ootz 62,
Well, you’re clearly energied up, but I was wondering what Climate Change risks your in for. In the Blue Mountains here it is fire, hail, flash rain deluges, heat and lightning. At my factory in Emu Plains I have had flash deluges and more recently a lightning strike. The lightning strike is a serious risk. It damaged millions of dollars of machinery in nearby factories, and blew up tvs, stereos, and a spot welding machine in my factory. Strangely all of CNC machinery was not damaged despite the factory taking a direct hit on the TV aerial. Apparently the strike came into the other buildings through the earth connection.
In your area you will be exposed to cyclone wind damage and deluge damage (Taiwan 3 metres in four days, wow). What are your other exposures? I am rethinking dwelling designs.
By the way my family has 3 chooks in the back yard (chinese type). We are not that serious about the eggs at the moment. I just like to see them doing their thing in the back yard. They are going to be sharing their part of the yard with a 30 foot ferro cement Bristol Channel Cutter design boat for the next 3 years while I build it.
Have a look at the Russian back yards in the top photo
http://www.deltaflier.com/categories/gallery/flight
These people know how to feed themselves.
Answer? Turnbulls approach is a total cop out and offers to achieve less than nothing.
Answer? Turnbulls approach is a total cop out and offers to achieve less than nothing.
So, what you are saying it is politics as usual? A snowing job, just jokeying to stay ahead in the party not to mention the polls. They say he is bold and ruthless, but has he got any ‘headland stuff’ out there, which would indicate where his approach is coming from and more importantly where it would lead to for the mums and dads. In that regard how would you rate his performance as Minister in the previous Gov?
Re Dwelling design, yup I can attest a worthwhile endeavor
. There is a definite slow but growing movement away from the McMansions. I did an Eco – Glenn Murcett number. Always liked that Oz shed look.
Re Climate Change impacts, put it this way, I rather live in the ‘Wet Tropics’ than ‘Down South’. However, I am reading at the moment a great tome with history of the region. Chapters on ‘Frontier War’ and ‘Great Depression’ provide some interesting insights into the human psyche when ’sh1t hits the fan’.