Simple climate action plan anyone?
December 7th, 2009 by Brian | Published in Climate change | 40 Comments
This guest post is by John Davidson. John is a semi-retired chemical engineer who has spent most of his life in the construction and mining industries. John has now set up his own blog.
Tony Abbot has opened up the emissions action debate by declaring that he is not going to support emission trading or carbon taxes. Instead he is favoring “direct action” to meet our 2020 emission targets. This post looks at how a simple action plan that largely depends on direct action might work.
Part of the problem with emissions trading is that it is a comprehensive scheme that, in its simplest form, sets out to put price pressure on all forms of greenhouse emissions. The first problem with comprehensive schemes is that they inevitably have to depend on clumsy, “one answer fits all” strategies such as “putting a price on carbon”, rationing etc. to drive the reduction of emissions. The problems with ETS, “one answer fits all” and putting a price on carbon have been discussed in more detail here.
The second problem is that it is easier to do something about some sources of emissions than others. In many cases it will not be technically or commercially practical to do much, if anything to reduce the emissions. Including these cases in an emissions trading or comprehensive carbon tax scheme will simply result in the pain of price increases without any emission reduction gain. In other cases there may be economic, social or other impacts that make it wise to defer action or at least manage the introduction of the change instead of relying on crude market pressures.
Penny Wong has dealt with some of these too hard cases by using free permits, compensation, etc. to reduce this unproductive pain. In effect, she has set up an “exclude by exception” system. However, the end result is a complex, difficult to understand and comes with high administration costs. Other comprehensive systems, such as the use of carbon taxes to put a price on carbon, will require similar complexities to minimize unproductive price pain.
It may make a more sense to take the opposite approach: Use a simple “include by exception” climate action plan that only sets out to do something about a limited number of emission sources at any one time. The following gives one example of how an “include by exception” approach might be used to reduce emissions by 25% by 2020.
The simplest plan would be to focus on the partial cleanup of power generation alone. In this case, a 25% reduction in total emissions would require conversion of all coal fired generation to gas, replacement of half coal fired by a clean technology such as wind or an appropriate mix of these strategies. Any realistic approach will have to be able to deal with a range of technical, supply, location and commercial issues. (It should also be noted that recent drops in the price of MRET credits are causing clean power providers to reconsider their investment plans. It is not sufficient to simply ramp up this system to drive the cleanup.)
Ideally, the cleanup plan needs to give the government the ability to drive the rate of change and to set boundaries on the acceptable mix of technologies, location etc. In addition, the plan should give price and supply certainty to consumers, potential investors and the operators of fossil-fuel-fired power stations. (See here for a more detailed discussion of the issues and alternative strategies for driving investment in the cleanup of major power generation.)
My preference would be to leave the price of dirty electricity unchanged while setting up a series of contracts for the supply of clean electricity combined with regulations to ensure the preferential use of cleaner electricity if offered at the contract price. The contract price and other agreements may vary from contract to contract. In addition, the government may need to issue contracts for the conversion of coal-fired to gas and the supply of standby power, as well as setting out an orderly plan for the ramping down of coal-fired power.
The outcome of these contracts and regulations would be to give appropriate control to the government, more certainty to potential investors, existing operators and workers as well as more supply and price certainty to consumers. Best of all, the average price of power would only ramp up slowly as the proportion of clean power increased thus giving business time to adjust and demands for special treatment to be deferred until actual impacts are known
The above base plan would allow the 2020 target to be easily met. However, it may be smarter to replace some of the cleanup of electricity with other options that cost less per tonne emissions eliminated. For example, we could go close to reducing total 2020 emissions by 5% by leaving the price of fuel unchanged and simply regulating to keep the average fuel consumption of new cars below the equivalent of 5 litres petrol/100 km starting 2010. Even larger reductions could be achieved by ramping down this target further over time and using subsidies or regulation for other efficiency measures such as the retrofit of older cars with plug in hybrid or the use of low rolling resistance tires. Other options might include regulations/subsidies aimed at improving the efficiency of computers and other electrical equipment, reducing building energy needs etc. Other changes might be made later as the homework is completed for other action or in response to changes to international agreements or the availability of new technology.
Action plans such as the one described above have a number of advantages over CPRS. They are simple enough for most of us to understand and don’t need the high administrative costs associated with something as complex as CPRS. There would be more price certainty since price increases would be driven only by real increases in costs, rather than by fluctuations in the price of carbon permits. Best of all, there is no reason why action could not be started before the next election.
It would be interesting to have suggestions and details for other actions that might be added to the 2020 plan.
The government would be smart to use the Senate rejection of CPRS as an excuse to put CPRS to the side for the time being while concentrating on tangible action to start the reduction of emissions before the next election. It is ridiculous for Kevin to be talking about the need for urgent action while supporting a scheme that won’t have any serious effect on emissions for a number of years.
John, there was an article in the Fin Review today suggesting that the Coalition might be looking at gas conversion. After all Macfarlane was the one that blew the whistle on CCS. So the Coalition might yet surprise.
There was also an interesting session on Saturday Extra on the weekend with Robert Gottliebsen and Carl McCamish of Origin Energy.
Gottliebsen reckons that coal is locked in to the exclusion of gas in the CPRS. McCamish said that the only gas being planned at present was as a backstop for wind and solar.
Makes you wonder.
I agree John that there are many measures we should try to implement outside of or in parallel with any overarching CPRS. However it is not simple to legislate on new car efficiency. Or to legislate on many of the other suggestions. They all require a great deal of political will, skill, capital and finally they require the numbers in parliament. Wislon Tuckey, Minchin et bloody cetera would die in a ditch to stop the banning of traditional model cars. And so would the car lobby. Am not saying it’s impossible but I think it would actually be harder than getting a tax or ETS up.
“The first problem with comprehensive schemes is that they inevitably have to depend on clumsy, “one answer fits all” strategies such as “putting a price on carbon”, rationing etc. to drive the reduction of emissions.”
The fact that you would say this, suggests you don’t understand emissions trading at all John. The strength of an ETS is that it is not a one size fits all policy. By pricing carbon, and allowing permits to be traded, it allows firms and households to adjust to the change in relative prices in different ways according to their differnet preferences and different costs of abatement. It is also complementary to other initiatives, not a substitute.
You also have the engineer’s attitude to dealing with energy policy. From the above, you appear to want Australia’s energy mix to be driven by government fiat. Now, that might be okay in a world where we know, with near certainty what the most cost effective energy sources will be in 10, 20, 30, years from now. But there is actually a lot of uncertainty about what the long-run cost curve for different technologies looks like, and you risk, with this strategy locking in an inefficient technology set. You should read some of Warwick Mckibbin’s stuff about the importance of taking uncertainty about future technological change into account when designing policy.
“My preference would be to leave the price of dirty electricity unchanged while setting up a series of contracts for the supply of clean electricity combined with regulations to ensure the preferential use of cleaner electricity if offered at the contract price. The contract price and other agreements may vary from contract to contract. In addition, the government may need to issue contracts for the conversion of coal-fired to gas and the supply of standby power, as well as setting out an orderly plan for the ramping down of coal-fired power.”
I have no idea how this is going to work within the current NEM and it sounds very woolly. Can you explain this in more detail? I simply cannot see how you can force a greater use of cleaner, more expensive energy sources without both forcing overall energy prices up (and so having a similar effect to an ETS), or making it unprofitable to run energy generating/retail companies. The cost of subsidies has to be paid by someone, whether it is labelled a tax or not.
Also, although you claim that you are not “pricing” carbon with such a strategy, indirectly you are. Converting Australia’s entire stationary energy sector to a combination of gas, wind and other technologies is not a free lunch and will require significantly higher retail energy prices to pay for it and probably higher taxes as well. A test of such a policy is whether the implicit cost per tonne of abatement with such a strategy is lower than that is likely under the CPRS, and all estimates of of the relative cost of such a strategy is that the abatement costs will be higher. Also are you closing off the option of making use of CCS and nuclear? With so many low-emission technologies available now and more likely in the future, is the government really in the best place to determine which should proceed? Why shouldn’t they instead provide a level playing field for many different technologies to compete?
You then go on to discuss energy efficiency policies again as though they do not have a cost and are not subject to lobbying from interest groups. They do have a cost, and they are passed on to motorists. Moreover, all the literature about such policies suggests that if instituted they are complementary to pricing carbon.
And to be honest, your scheme looks anything but simple, when you get into the detail of how it will be implemented. Moreover, there will be little certainty about the actual size of emissions because your policy has no mechanism to prevent emissions from exceeding their target. Take fuel efficiency standards for cars. If aggregate emissions do not have to fit within a broader carbon budget, then reductions in emissions per car could simply be offset by increased miles driven per car. Are you going to regulate the amount people can drive as well?
Finally, you make the mistake that is made over and over again on this site of contrasting the poor design of the CPRS with an idealised alternative policy not subject to political constraints. The targets, payoff to industry and design of the scheme have been through a political sausage machine and for that reason are not ideal from a policy perspective. But how do you think your ideas will look once subject to a similar process? Given its constituency and reasons for rejecting the CPRS do you think the coalition is going to support a policy that simply significantly increases energy prices through other means and screws over their coal/fossil fuel constituency?
In short, the CPRS has problems, but this grab-bag of policies that does not give a role to changes in relative prices to drive behavioural change is a non-starter – the government will not have a bar of it.
I’d further add that this kind of strategy is perfect for a government that wants to look like it’s doing something on climate change, while emissions continue to rise, because it can mandate a passel of feel-good, cheap, but small-beer measures. Things like banning incandescent light globes, for instance…
I’d say John has the (sadly) typical engineers bias against the field of economics.
In a situation where you have a hard ceiling on the availability of a resource and buyers are well informed (and if you’re buying Carbon Permits you are) we don’t have more efficient pricing mechanisms than markets.
Want to continue to run that dirty coal fired power station/fleet of inefficient vehicles/etc? You’re free to do so, you’ll just be at a (steadily increasing) disadvantage to competitors who adopt less carbon-intensive technology.
If we are serious as a nation about reducing carbon output on an ongoing basis we need to treat carbon/GHG emissions as the finite and shrinking resource it is. An ETS does this, carbon taxes and solutions outlined above do not.
Folks might be interested in this piece by Paul Krugman, which seems apposite.
Some irony that nuclear power for Oz depends on a carbon price to make it economical. A conundrum for the deniers.
A simple plan is to switch off…unfortunately I think a majority of people have.
Interesting link at 6 and one from the follwing comments – why not cap/trade the big emitters and tax the many smaller entities?
One concept which keeps being overlooked or avoided is that the allowed emissions total will be progressively lowered and this is the driver of the changes in way emitters produce.
Do people just have a complete lack of faith that any government will stick to this program once it starts?
I can easily envisage a situation in the future when special pleading results in “new” credits being created after some natural or economic disaster develops.
This would seem a certainty as the “political sauage machine” mangles the intention but promotes a preferred political outcome for the governing party and it’s sponsors/ supporters.
From the Krugman article @6
He also goes on to restate that hard science types tend to be dismissive of economics and make all the same mistakes again.
Oh, and Murf @9, if you Cap and Trade *AND* Tax, you’re effectively hitting the little guy twice. The cost of Carbon Emission is already factored into just about everything they buy, if you slap a tax on top of that you’ve additionally disadvantaged them. It would be like having both a Wholesale Sales Tax as well as a GST.
A Simple Plan. Great film which made the point that a simple plan is never as simple as it seems to its proponents.
I’m happy with cap and trade even as modified by exclusions and subsidies. The Anderson approach seems to me toi require an all-knowing Government
I’m happy with cap and trade even as modified by exclusions and subsidies. The Anderson approach seems to me to require an all-knowing Government making regular calls about what to do next. But Governments are not good at these things. There are also inevitably going to be unintended consequences of specific actions which will reduce the effectiveness of those actions. For example, conversion of power stations from coal to gas might reduce the price of coal rather than the quantity sold. I’d rather a market approach which puts financial pressure on the polluters to find the most efficient way to reduce their emissions.
Boy, this sure reminds me of my coaching days. You have no idea how many parents in the stands could do a better job.
Are we going to have an alternate plan every week from now on?
I finally see what Abbott meant by “Watch this space…”.
Ok, so we are all agreed to keep plugging for a system that is not transparent to the average punter, and therefore vulnerable to the vagaries of populist politicians? (we don’t have any do we?)
Frankly, I think this scheme or one like it is more likely to actually reduce carbon footprint than all the talkfests past, present and future on carbon taxes, and capntrad schemes.
Although I am oddly drawn to the strategem of just not making transport or non-green power sources tax deductible, which is a carbon tax of course).
However, that would be far too simple for the economists, too easily understood by the community, and way too immediate in its effect. Can’t have that now can we?
I do wish Hansen would stop bagging cap and trade schemes, because as Krugman says, its the only thing we’re likely to get up in the near term.
That said, Hansen is probably right that cap and trade schemes haven’t been very effective thus far, and if you’re after a simple plan to tackle climate change, his tax-the-carbon-at-the-mine-or-port scheme is about as simple as it gets. It won’t happen because it doesn’t have political support anywhere, but it is simple.
Its my belief that no government will ever price carbon to the point where it starts hurting and changing behaviour. Its politically impossible, and an irresistible target for a “Great Big New Tax” strategy that Abbott is employing. The only way forward in my view is to price energy so that clean energy is cheaper rather making dirty energy more expensive. Of course there will be a cost because these rebates need to be funded, but I offer it as the only politically feasible option.
Carrots not sticks.
Actually, the cap and trade system has proved successful in the past.
http://www.america.gov/st/energy-english/2009/November/20091113133419saikceinawz2.802676e-02.html
As opposed to an ETS which relies on an all-knowing market…
… it is easier to do something about some sources of emissions than others
Precisely, which is exactly why you want to put a price on carbon. It means normal commercial practice leads people to choose doing the easy things to get their carbon emissions down rather than doing the hard things. Everybody except the odd Green Puritan who thinks consumption is inherently sinful can agree that’s a Good Thing.
The way you put that price on is, of course, a separate question. But it’s no harder to resolve than having politicians decide how much to spend on which technologies based on public sentiment-du-jour and the pork-barrelling needs of marginal electorates.
desipis, I’m far from a free market fundamentalist type but you have to admit that the “all knowing market” has an infinitely better track record at picking technology winners than governments, not because the participants are all-knowing but because they have skin in the game. When people have their own money at stake they tend to bet with their head rather than their heart.
derrida derrida,
The big problem with a market mechanism is the uncertainty over the price. This uncertainty is a risk for businesses in carbon intensive industries, and that risk is a cost over and above any actual price for carbon. I’m not convinced that this uncertainty cost and the administration cost of an ETS won’t overshadow the theoretical efficiency gains from using a market mechanism.
“The second problem is that it is easier to do something about some sources of emissions than others. In many cases it will not be technically or commercially practical to do much, if anything to reduce the emissions.”
The Idea behind putting a price on carbon isnt just to drive technological innovation like you’ve focussed on here, its also about CHANGING BEHAVIOUR. Thats why its important that there’s a price on emissions from industries where it’s not technically or commercially practical to do much, so people substitute away from production in that industry.
Also desipis @ 19, probably the major advantage of ETS schemes is that they cap emissions, government led technological fixes dont do that. The problem isnt to do with knowledge as to what the technological fix will be, its the uncertainty of knowing what effect a certain technological fix will have on emissions.
desipis, Yes a market mechanism does come with price uncertainty, however you’ve got to weigh that against the uncertainty regarding the risks to the climate if we overshoot the targets that we eventually set. I see this uncertainty as the bigger issue. Business has shown that it can cope with price fluctuations, just look at exchange rates. The climate is much less able to adapt.
I would have thought the major advantage we want from any scheme is an emissions reduction not an emission cap. If the government actually did some wayout stuff like investing in clean energy infrastructure which replaced brown coal for example then a cap would be redundant.
the point is that a cap guarantees a certain level of emissions reduction, government investment in technology doesnt.
Desipis
Uncertainty over the future price of emissions certificates is one of the advantages of an ETS, because people have to err on the side of cleaning up emissions if they are not to accept what amounts to taking a short position on carbon price, with all the risk that entails. That feature is probably why the first Bush Administration’s SO2 cap and trade scheme acheived its goals three years early.
Once traders have taken a position they have a strong interest in protecting it, meaning that there are structural constraints to fiddling with the architecture. This will tend to take the special pleading out of the system because there will always be a set of stakeholders that will oppose watering down the system.
Plainly, if you buy certificates but make more rapid progress than you thought possible, you will still want these certificates to hold their value, as an offset to your system conversion costs.
We can still do an audit and come up with direct fixes for the highest density sources of pollution and work our way through the list down to the lowest density sources of pollution. All of this can be done without a cap and can give us certainty over how much carbon we are emitting and how much we have reduced our emissions by.
I regard the latest declaration by the US EPA as quite a positive step. It is the big stick which may drive a wedge into the opposition to Waxman-Markey. For all their wailing and gnashing of teeth, the idea of having CO2 regulated by the Feds appeals to them a lot less.
I tried to post to JohnD’s blog but it proved problematic so I will comment here.
I agree with you whole heartedly, John. The notion of developing an all inclusive plan was used by Rudd as his reason for taking time to present his “solution”. Then as soon as the all inclusive plan was revealed exceptions were required. Agriculture for starters, coal fired power plants, and all other CO2 emitters. The only non exempts from what I can see are SME’s and rich people.
Some time ago I demonstrated that a 20% levy on the retail price for electricity was sufficient to completely replace our coal fired system with Concentrating Solar Thermal power stations with some Geothermal capacity mixed in, by 2040. This would reduce Australia’s emissions by around 40%. Along the way there would be many other iniatives in other fields achieving reductions. If you trawled LP you would be able to find the full explanation.
I was just listening to a prominent scientist from the Goddard Labs saying that the use of coal must be eliminated at speed, yet governments around the world have acted to insure its increased consumption. He also affirmed that, as we all know, Clean Coal is a myth.
I am pleased to see that you have Gizmag in your LIV’s.
I have spent most of my working life in the construction and mining industry which despite various faults, is good at making things happen. In recent times this has included working as the senior process engineer for a company who held a number of coal mining and washing contracts. In two of these cases this company was was the primary contractor for the construction of the mine and processing facilities as well as the operating contract. So, while I don’t claim expertise in the power generation industry, I would claim to know something about the issues involved in setting up and execution of construction and operating contracts similar to what might be required for the supply of cleaner electricity.
If a coal mining company decides it needs a coal washery it will put out a call for tenders. This tender will normally come with a set of specifications that are designed to ensure that the washery will be able to do the task required at a reasonable operating cost. The specifications may include capacity, product quality, efficiency wear resistance and quite often the acceptable suppliers and specification for key equipment. Calls for tenders are substantial documents. Tender specifications don’t stop non-conforming tenders being submitted when a contractor believes this would advantage the client. In some cases these are accepted – It doesn’t make sense to be too pedantic in the real world.
I would envisage a similar process for the setting up of contracts for the supply of clean electricity. Too much prescription would be a problem but some boundaries would be necessary. For example, wind power output would vary more if most of the wind farms were in the same area. So it makes sense to exclude some areas from extra wind power. There is no need to limit solar right now because it will help supply peak power demands. However, at some time in the future, a limit would have to be put on the percentage of solar that is not backed up by power or heat storage.
If the government had put out invitation to tender for the supply of clean electricity (Or a more general tender for the reduction of net carbon pollution.) They would be going into the next election with a substantial increase in clean electricity capacity in place or well on the way to being in place. However, even if CPRS had been accepted, it would have been years after the next election before any real abatement of emissions had started.
For more details on cleaning up electricity here
A direct results driven approach to energy change is indeed the most efficient. I believe that the public intuitively epects your above detailed approach. The notion that applying a price to carbon might magically induce energy infrastucture restructuring was at best wishful thinking, more realistically delusional, cynically a political fraud.
One advantage of an energy useage levy is that the infrastructure built with the proceeds carries an optional payback requirement. This feature can be used to alleviate output energy pricing disparities in the early stages of such a programme.
Caps sound wonderful in theory but does anyone really believe that a government would hold its nerve and insist we put up with blackouts in the name of emission cap theory when there is dirty power capcity unused because of a shortage of carbon credits?
How many of the people applauding CPRS understand that Penny put a carbon credit price cap in just to avoid the power shortage crisis – Cap-lite or lite-cap is what it is called – She is right-this cap busting let out has to be a feature of any practical system cap and trade system.
“How many of the people applauding CPRS understand that Penny put a carbon credit price cap in just to avoid the power shortage crisis – Cap-lite or lite-cap is what it is called – She is right-this cap busting let out has to be a feature of any practical system cap and trade system.”
We all understand that there is a price cap in the CPRS John – it has been debated on these forums at length. However, it is a transitional, not permanent feature of the scheme. The EU ETS price “cap” in contrast is too high to ever be binding (it operates as a genuine penalty), so binding price caps are not inevitable features of cap and trade schemes.
“We can still do an audit and come up with direct fixes for the highest density sources of pollution and work our way through the list down to the lowest density sources of pollution.”
You are massively underestimating this task. For a start, rigorous data on actual emissions is not available in real time. Second, once you have identified a gap between actual and desirable emissions it is not straightforward to come up with direct fixes that aren’t also incredibly expensive.
“The big problem with a market mechanism is the uncertainty over the price.”
Actually, no. That is the point of the secondary market for permits – to allow firms to manage their carbon risk. This statement is like saying we should have a fixed exchange rate to avoid uncertainty about the traded goods prices. Firms hedge to manage this risk.
John, your statement at 29 reveals even more strongly than the original OP that you have a strong taste for central planning. While planning is important at the firm level, to think that a central government agency can manage supply and demand well, not only in the energy sector but across the economy, within the context of uncertainty about future demand and supply, without the assistance of the price signals that market based mechanisms provide is fanciful.
I agree with John Davidson that it is not beyond the wit of government to establish and run an electricity generation grid. I also agree that it would be the best thing to do. Governments managed it quite well for decades. Even better than Enron – and they were really smart guys.
However the ideological battle to get to John Davidson’s position would be harder than getting the CPRS up. I’d start with the ETS now – and head for the national generating grid in the longer term.
John’s plan allows for the venerated genius of private enterprise very well through the tender process. Object-oriented approach – I like it.
It’s the same way the US military builds its force infrastructure. Anyone can tender to build the next best warplane if they’re up to it.
In the same way the Australian Department for CPRS Electricity can tender to Westinghouse for 500MW of solar in Wagga; and tender 1000MW of geothermal out to BHP-Origin.
LO@32,
ABC just now is talking of uncertainty over failing returns for investment significantly disrupting future alternative energy investment. The whole idea of the “market” intelligently regulating management of the crisis that our environment problem is, is delusional (I seem to be needing that word more persistantly). Market instuments have a place in determining the efficiency of construction, but not of strategic management, which is where our principle immediate need is. Right now we have a need to pick front runners in alternative energy sources, driving forward to achieve targets in a verifiable manner. We don’t have the luxury of dropping energy initiatives to wait as hopeful new horizon technologies appear in the distance. Economists, who invest in nothing, are saying “the market will decide”, Entrepreneurs, who invest everything, are saying “we want certainty”. The answer is somewhere in between. It is really the government who must decide but the CPRS is a decision cop out, intended to avoid facing reality.
Denmark got to where it is (20% wind) through the use of a green tax on coal, I believe. Trouble for most countries however, is that they don’t have Denmark’s high social capital which affords progressive taxation policy.
(Australia’s CO2 pollution is 2.5 times higher per capita than Denmark.)
This
http://www.iea.org/Textbase/pm/?mode=pm&action=detail&id=1573
tells that story. It is a story with some history to it. Denmark acted a decade ago, and not in an apologetic manner. I totally endorse direct targeted taxation as an instrument for change. However, we do not have the luxury from where we are now, thanks to John Howard, to feed the proceeds through the economy to support action through incomes. We now must invest the proceeds directly and completely into the infrastucture required.
Brendon @17: I actually think that the decision to use elision trading to deal with acid rain was the right decision. The reason for this is the complexity of the acid rain issue did not lend itself readily to the traditional regulatory approach. There were a variety of coals with varying sulphur levels. The effectiveness of coal washing at removing this sulphur varied depending on coal petrology. Some power plants were better placed to buy low sulphur coals than others.
So in this case, an ETS made sense. A power station had the choice of buying low sulphur coal or installing a gas scrubber or buying more permits/kWh or going out of business. Miners of high sulphur coal had the choice of selling at a low price, washing to reduce sulphur, changing the mine plan to reduce average sulphur or go out of business.
Importantly, the decision to go ETS was made by people who understood the issues and who had considered alternatives.
By contrast, the ABC reported:
This doesn’t sound like someone who understood the issues and considered alternatives before committing to something as complex as CPRS.
What I would really like to know is if someone can see practical issues that I have missed in my analysis of cleaning up power and reducing the average fuel consumption of new cars. I would also appreciate it ETS supporters would explain to me how ETS will handle these issues and what has to happen to the average price of electricity during the decades this cleanup will take?
It just occurred to me how global warming action demands made on China can blow up in the face of the West.
China manufactures a lot of carbon heavy products in huge bulk. Materials such as steel, for instance, the West no longer has large capacity to produce. China may very well in future take a more strategic approach to high CO2 emitting products in order to trim its CO2 emissions to meet commitments. China has already demonstrated its ability to perform in this way with material such as phosphoric acid and aluminium. The rub here is that if China decides to drop supply of bulk low profit materials preserving their production for higher value added exports, this will throw the carbon load back at the West. China has been a convenient whipping boy for beligerant Western politicians wanting to avoid their own responsibilities such as Bush, Howard and Rudd. This may yet backfire horribly.
Setting up a Solar Fund of 10 Billion Dollars would have to come close to being a good start, wouldn’t it?!!?
Bilb @38: Quite right. The alternative is that China will start putting a carbon value on its exports so that emissions are measured by consumption of end products rather than how much fossil carbon actually creates emissions in that country.
It is interesting. We complain about how China was responsible for 56% of the growth in emissions between 2003 and 2007 but we neglect to mention that, on a per capita basis our contribution to this growth was over twice that of China and 12 times that of India – Sure we won’t start reducing world emissions without action from China but we wont get much support from China given outr appalling per caoita effort